| We have audited the accompanying financial statements of SIP INDUSTRIES
LIMITED ("the Company"), which comprise the Balance Sheet as at
September 30, 2014, and the Statement of Profit and Loss and 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
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
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 misstatement 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 the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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 September 30, 2014;
(b) in the case of the Profit and Loss Account, of the loss for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
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 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. 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;
e. on the basis of written representations received from the directors
as on September 30, 2014, and taken on record by the Board of
Directors, none of the directors is disqualified as on September 30,
2014, 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.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT Re: SIP INDUSTRIES
LIMITED,
Referred to in paragraph 1 of our report of even date,
i)
(a) The Company is maintaining proper records showing full particulars,
including quantitative details and situation of fixed assets;
(b) Fixed assets have been physically verified by the management at
reasonable intervals; no material discrepancies were noticed on such
verification.
(c) No substantial part of fixed assets has been disposed off during
the year.
ii)
(a) All inventories maintained in the Floriculture Division are
perishable in nature. Hence, the company has not taken any value for
the closing inventory.
(b) The stock in trade shown under Balance Sheet relates to shares.
These shares are valued at lower of cost or market value.
(c) In our opinion and according to the information and explanations
given to us, the procedures followed by the management for physical
verification of the above said items are reasonable and adequate in
relation to size of the company and nature of its business.
(d) The company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii)
(a) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
(b) The company has taken unsecured loan from SIP Technologies &
Exports Limited and from Managing Director. The maximum amount
outstanding during the period of such loans was Rs. 1.18,04,984/- and
amount remaining unpaid at the year end was Rs. 1,18,04,984/-.
The company is not charging any interest on the said loan. The question
of payment of interest on the said loan does not arise as interest is
payable as per the mutual arrangement at the time of final settlement
that may be on demand along with the principal. All other terms and
conditions are prima - facie not prejudicial to the interest of the
company.
In respect of repayment of principal, the agreement between the
companies does not specify a fixed repayment schedule. Considering the
above, question of overdue does not arise.
iv) 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 inventory, fixed assets and for sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
v) As per the information and explanation given to us, the contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 that
needs to be entered into the register have been so entered.
vi) The company has not accepted any deposits from public during the
year. Hence the provisions of section 58A, 58AA or other relevant
provisions of the Companies Act, 1956 are not applicable.
vii) The internal audit for the period has not been carried out even
though required. The management informs us that there have been no
manufacturing activities during the period and other activities are not
significant.
viii) No cost audit has been prescribed for floriculture division.
ix)
(a) The company has generally been regular in depositing undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income-Tax, Sales-Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, cess and any other statutory dues with the
appropriate authorities. According to the information and explanations
given to us, no undisputed amounts payable were in arrears, for a
period more than six months from the date they become payable. The
Employees' State Insurance Act does not apply to the company.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax/lncome Tax/Customs Duty/Wealth Tax/ Service
Tax/Excise Duty/Cess which have not been deposited on account of any
dispute other than those given below:
Name of the statute Nature of Dues Amount
Income Tax Act 1961 Tax, Interest u/s 234B u/s Rs. 3,01,697-
234C u/s 220(2) AY 2000-01.
Income Tax Act 1961 Tax, Interest u/s. 234B u/s Rs. 39,98,745/-
220(2) AY 1996-97.
Name of the statute Forum where dispute is pending and status.
Income Tax Act 1961 Waiver petition before the Chief Commissioner
of Income Tax, Chennai for interest and
rectification petition U/s. 154 before AO.
Income Tax Act 1961 Waiver petition before Chief commissioner of
Income Tax, Chennai for interest and
rectification petition U/s. 154 before AO.
x) The company's accumulated losses as at 30th September 2014 have
exceeded 50% of its net worth and it has incurred cash losses in the
current financial year and the immediately preceding financial year.
xi) The company has not taken any loan from Banks or any other
Financial Institutions. So the question of default in repayment does
not arise.
xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Hence the question of maintenance of documents and records does not
arise.
xiii) The Company is not a chit fund or a nidhi / mutual benefit fund /
society. Hence this clause is not applicable to the company.
xiv) The company is a dealer in shares, debentures etc., and proper
records and books of accounts are maintained. Also the company in its
name holds the shares and debentures.
xv) The company has not given any guarantee for loans taken by others
from banks or financial institutions based on the records produced to
us.
xvi) In our opinion, the company has not taken any term loan from Banks
or Financial Institutions.
xvii) The company has not acquired any Long Term and Short Term loans.
So, the provisions of clause (xvi) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company.
xviii) According to the information and explanations given to us,
during the year the Company has not made preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of the Act.
xix) As per the information and explanation given to us, the company
has not issued any debentures during the year.
xx) The company has not raised any money through public issue. Hence
the provisions of clause 4(xx) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company.
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place : Chennai For P.B. Vijayaraghavan & Co.
Date : 28.11.2014 Chartered Accountants
Firm Regn No. 004721S
P R Krishnamurthy
Partner
Membership No. 012622 |