We have audited the accompanying financial statements of Chromatic
India Limited (the Company), which comprise the Balance Sheet as at
March 31, 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
The Company''s 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) read with
the General Circular 15/2013 dated 13th September, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act;
2013 and in accordance with the accounting principles generrally
accepted in India. 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, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. 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 aforsaid financial statements, subject to
note nos. 27, 28, 29, 30 & 34 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 March 31, 2014;
(b) In the case of the Profit and Loss Account, of the Profit of the
company for the year ended on that date and
(c) In the case of the Cash Flow Statement, of the cash flows of the
company 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 & 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 and 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 and 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 read
with the General Circular 15/2013 dated 13th September, 2013 of the
Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013.
e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of Section 274(1)(g) of the Companies
Act, 1956.
Annexure to Auditors'' Report [Referred to in paragraph 1 under the
heading of report on other legal and regulatory requirements of our
report of even date to the members of Chromatic India Limited on the
financial statements for the year ended March 31, 2014]
1. In respect of its Fixed Assets:
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, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion, is reasonable having regard to the size of the Company and the
nature of its assets. As informed, no material discrepancies were
noticed on such verification.
c) There was no substantial disposal of fixed assets during the year.
2. In respect of Inventories:
a) The inventories have been physically verified by the management
during the year. 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 inventory. As explained
to us, there were no material discrepancies noticed on physical
verification of inventories as compared to the book records. r.
3. In respect of the Loans, secured or unsecured, granted or taken, by
the company to/ from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act; 1956:
a) There are two subsidiary companies to whom the Company has granted
loans, secured or unsecured. The total amount involved is Rs. 21617.47
Lacs.
b) Loans given to subsidiaries are interest free loans and the same is
not considered as prejudicial in view of the fact that the companies
are wholly owned subsidiaries.
c) As per the management, the parties will pay principal amounts as and
when demanded.
d) There is no overdue amount of loan granted to said companies.
e) The company has taken short term loan from one company covered in
register maintained under section 301 of the Companies Act, 1956 from
whom the Company has taken loans, secured or unsecured. The amount
involed is Rs. 48.86 Lacs. The loan is repayble on demand. The loan is
interest free and not prejudicial to the interest of the company.
4. In our opinion and according to the information and explanations
given to us, there exists 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 with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control
system in respect of these areas. During the course of our audit, we
have not observed any continuing failure to correct major weakness in
internal control system of the company.
5. In respect of the contracts or arrangements referred to in section
301 of the Companies Act; 1956:
a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
b) None of the transactions made in pursuance of any contracts or
arrangements exceed the value of Rupees five lakh in respect of any
such party in the financial year.
6. According to the information and explanations given to us, the
company has not accepted any deposits from the public within the
meaning of sections 58A and 58AA of the Act and the rules framed there
under. Therefore, the provisions of clause (vi) of paragraph 4 of the
order are not applicable to the company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. The Company is required to maintain the cost records as prescribed
by the Central Government of India under clause (d) of sub-section (1)
of section 209 of the act for the activities carried on by the company.
We are of the opinion that primafacie the prescribed records have been
maintained. We have, however, not made a detailed examination of cost
records with a view to determine whether they are accurate or complete.
9. In respect of statutory dues:
a) Undisputed statutory dues including provident fund, investor
education and protection fund, Employees'' state insurance, income-tax,
sales-tax, wealth-tax, customs duty, excise duty, have not been
regularly deposited with the appropriate authorities and there have
been slight delays in few cases.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, wealth-tax,
sales-tax, customs duty, excise duty and other undisputed statutory
dues were outstanding, at the year end, for a period of more than six
months from the date they became payable except an amount of Rs.
20,79,000/- on account of Income Tax for the A.Y. 2012-13 for which
return is also not filed, Rs. 2,30,510/- on account of Dividend
Distribution Tax for the F.Y. 2012- 13 and interest thereon.
10. The Company''s accumulated losses at the end of the financial year
are less than fifty per Cent of its net worth and it has not incurred
cash losses in the current and immediately preceding financial year.
11. Based on our audit procedures and as per the information and
explanations given by the Management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) order, 2003 (as amended) are not
applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) order,
2003 (as amended) are not applicable to the Company.
15. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions.
16. The term loans have been applied for the purpose for which the
loans were obtained.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
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.
19. The Company did not have any outstanding debentures during the
year.
20. The company has not raised any monies by way of public issues
during the year.
21. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S. K. Badjatya & Co.
Chartered Accountants
Firm Registration No. 004017C
CA. Sudhir K. Jain
Place: Mumbai Partner
Date: May 30, 2014 Membership No. 072282
