We have audited the accompanying (standalone) financial statements of
Advanced Micronics Devices Limited (the Company) which comprises the
Balance Sheet as at March 31, 2015, and the Statement of Profit and
Loss for the year then ended, and the cash flow statement for the year
ended and a summary of significant accounting policies and other
Management''s Responsibility for the (Standalone) Financial Statements
The company''s Board of Directors are responsible for the matters stated
in section 134(5) of the companies act 2013 (the Act) with respect to
preparation and presentation of these financial statements that give a
true and fair view of the financial position and financial performance
and cash flow of the Company in accordance with the Accounting
Standards referred to under section 133 Of The Companies Act 2013 read
with Rule 7 of the companies (Accounts) Rule 2014. This responsibility
includes the maintenance of adequate accounting records in accordance
with 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
judgment 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 accounting records, relevant to the preparation and
presentation of the financial statements that gives a true and fair
view and are free from material misstatement, whether due to fraud or
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standard and the matters which are required to be included
in the audit report under the provisions of the Act and Rules made
We conducted our audit in accordance with the Standards on Auditing
specified under subsection 10 of section 143 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 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 in order to
design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion whether the company has
place an adequate internal financial controls system over financial
reporting and operating effectiveness of such controls. An audit also
includes evaluating the appropriateness of 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
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion on the
standalone financial statements.
Basis for Qualified Opinion
1. During the course of audit we have observed that company has stock
Of Terminal and Multi Para Patient Monitors was nonmoving resulted in
not being sold aggregating to Rs.18.44 crores.
2. Similarly we have also noticed bills receivable amounting to
Rs.17.79 crores are not realized for more than 360 days as on March
2015 continue to be unrealized as on September 2015.
Which includes non-moving stock and unrealized Debtors covered under
stock audit report of Subhas Patil & Co , for financial year 2013-14 a
firm of independendent chartered accountants appointed by State Bank of
India . We had qualified our audit report regarding nonmoving stock
terminals and multi Para patient monitors not being sold amounting to
Rs.17.47 crores and Rs.19.67 crores long outstanding receivables for
more than 180 days for the financial year 2013-14.
In response to our qualification , the management had given reply that
they will modify the terminals and multi Para patient monitors and sell
them in developing countries. On perusal of balance sheet of the
company, position remains the same as on the date of report.
Also Company has not obtained confirmation of balances of debtors
outstanding as on 31.03.2015.
Accordingly company has not made provision for bad and doubtful debts .
Had the same been accounted for the net loss for the year ended
31.03.2015 would have been higher by Rs.36.23 crores and Net worth of
the company would have been negative.
3. We also observed that Company has a branch at U S A. This branch
has not been audited by any other independent auditors for any
financial year and also the company has not produced any records for
our verification to check the correctness of the entries. These entries
are certified by management, where in the branch share of assets are
Rs.5.42 crores Our report in so far it relates to the amount included
in respect of the branch is based solely on financial statements
certified by the branch management. In the absence of independent audit
we are unable to comment on correctness of unaudited results of the
above mentioned branch..
4. During financial year 2013-14 , the Indian subsidiary , Advanced
Micronics Devices Limited had opted for VCES scheme under service tax
act for its service tax liability outstanding for the period October
2007 to December 2012 . This pertains to its Delhi branch and Bangalore
branch. However during the survey conducted by service tax intelligence
at its Delhi branch on 29/6/2013 , it was found that the company had
utilized canvas credit of Rs.0.80 crores for payment of service tax
liability of Delhi branch under VCES scheme. This credit was disallowed
by service tax intelligence and the company was issued a Show cause
notice. The company has filed a reply before Commissioner of Service
tax Delhi. If the reply is not favorable to the company, company will
be liable to pay interest and penalty on such amount. Under such
circumstances they are not eligible for claiming benefit under VCES
Whereas in Bangalore branch they have accepted not claiming canvas
credit for payment of service tax liability under VCES scheme. There is
variance in two VCES applications. We are Opinion that VCES application
may be disallowed at Delhi branch and company may land up in huge
penalty. To that extent there is a contingent liability on the company.
5. company has stopped its business operation since July 2015.
All the above conditions raise substantial doubt about the company,
ability to continue as a going concern
Subject to above, in our opinion and to the best of our information and
according to the explanations given to us, the aforesaid standalone
financial statements gives 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 March 31, 2015;
b) in the case of the Profit and Loss Account, of the loss for the year
ended on that date.
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on other Legal Regulatory Requirement
1. As required by Companies (Auditors Report)Order 2015 (the
order)issued by the central government of India in terms of section
143(11) of the Act we give in annexure a statement on the matters
specified in 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
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
c) The Balance Sheet, Statement of Profit and Loss and cash flow
statement , dealt with by this Report are in agreement with the books
d) Subject to qualification in respect of debtor and stock in our
opinion the afore said financial statements comply with the Accounting
Standards specified of section 133 Of The Companies Act 2013 read with
Rule 7 of the companies (Accounts) Rules 2014.
e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164(2) of the Act
f) With respect to the other matters to be included in the Auditors''
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 does not have any pending litigations which would
impact its financial position;
ii. The company did not have any long term contracts for which there
were any material foreseeable losses; and
iii. there were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the company.
For An and Amaranth and Associates Chartered Accountants
B K Amarnath
Partner Membership No. :026536 FRN: 000121S Place: Bangalore Date : 1st
(Referred to in our Report of even date on the accounts of Advanced
Micronics Devices Limited, Bangalore for the year ended 31st March 2015)
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification .
2. (a) We are informed that the physical verifications of inventories
were conducted 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 explanations
given to us, 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 inventories. Subject
to qualification about nonmoving stock amounting to Rs. 18.44 crores ,
according to the records produced to us, no discrepancies were noticed
on verification between physical stocks and stock records.
3. (a) As per the explanation given to us the Company has not granted
any secured or unsecured loans to the Parties listed in the register
maintained under section 189 of the Companies Act
4. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods. During the course of our audit, no
major instance of continuing failure to correct any weaknesses in the
internal controls has been noticed.
5. The Company has not accepted any deposits from the public .
6. Since the company is involved in trading activity only, the Central
Government has not prescribed maintenance of cost records under section
148 (1) of the Companies Act, 2013 for any product of the company.
7 (a) On the basis of records produced before us, the Company has
generally not been regular in depositing undisputed statutory dues
like, Employees State Insurance , Provident Fund, Income Tax, Service
Tax, etc. According to the information and explanations given to us,
there are no undisputed amounts payable in respect of, Customs Duty,
Excise Duty, Income tax except below mentioned statutory dues.
(Rs. in crores)
Service Tax 0.11
Dividend distribution tax 0.31
Provident Fund 0.01
Tax deducted at source -other than on salary 0.05
Tax deducted at source on salary 0.35
which were outstanding as on 31st March 2015 for a period of more than
six months from the date on which they became payable
(b) According to the information and explanations given to us, there is
no amounts payable in respect of income tax, wealth tax, service tax,
sales tax customs duty and excise duty which have not been deposited on
account of any disputes.
8. The Company does not have any accumulated loss , but has incurred
cash loss of Rs.1.96 crores during the financial year covered by our
9. During the year, the company did not have any outstanding dues to
financial institutions and banks.
10. In our opinion and according to the information and explanations
given to us, the Company has given any guarantee for any loans.
11. According to the information and explanations given to us company
has not obtained any term loans for the period covered under the audit.
12. Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case by the management.
For Anand Amarnath and Associates
B K Amarnath
Membership No. :026536
Date : 1st December 2015