We have audited the accompanying financial statements of Ganesha
Ecosphere Limited (the Company), which comprise the Balance Sheet as
at March 31, 2014, 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, which we have
signed under reference to this report.
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 notified under 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. 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 and other applicable authoritative
pronouncements 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 entity''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 accompanying 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 March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit 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'', as
amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as the Order), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, 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, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
notified under 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; and
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 clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
(Referred to in Paragraph 1 under the heading of Report on Other Legal
and Regulatory Requirements of our report of even date)
(1) (i) The Company has maintained proper records showing
full particulars including quantitative details & situation of fixed
assets on the basis of available information.
(ii) As explained to us, the fixed assets have been physically verified
by the management during the year under regular program of
verification, which in our opinion is reasonable, having regard to the
size of the Company & nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
(iii) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(2) (i) As explained to us, inventory except for goods in transit has
been physically verified by the management at reasonable intervals
during the year.
(ii) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(iii) On the basis of our examination of inventory records, we are of
the opinion that the Company is maintaining proper records of
inventory. As explained to us, there were no material discrepancies
noticed on physical verification of inventory as compared to the book
records.
(3) (i) According to the information and explanations given to us, the
Company had granted unsecured loan to a Director covered in the
register maintained under section 301 of the Companies Act, 1956 prior
to his appointment as a director in the Company. In respect of said
loan, the maximum amount outstanding at any time during the year after
his appointment was H1,112,407/- and the balance outstanding as on 31st
March 2014 is H877,550/-
(ii) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loan given by the Company are not prima facie prejudicial to the
interest of the Company.
(iii) In respect of aforesaid loan, receipt of principal amount and
interest are regular.
(iv) In respect of said loan & interest thereon there are no overdue
amounts.
(v) According to the information and explanations given to us, the
Company has taken unsecured loans and fixed deposits from two
Companies, four directors and nine other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
During the year H41,290,000/- were taken as loan and the maximum amount
involved during the year was H58,704,409/- and the balance outstanding
as on 31st March 2014 is H50,690,000/-.
(vi) In our opinion and according to the information and explanations
given to us, the rate of interest & other terms and conditions of such
loans taken by the company, are not prima facie prejudicial to the
interest of the Company.
(vii) In respect of unsecured loans taken by the Company, principal
amount including interest is repayable on demand and there are no
stipulations as to the payment of principal amount & interest thereon.
In respect of fixed deposits taken by the Company, payment of principal
amount & interest are regular.
(4) 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, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
system.
(5) (i) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that Section.
(ii) In our opinion and according to the information and explanations
given to us, the Company has not entered into any transaction for the
sale, purchase or supply of any goods, materials or services or for
underwriting the subscription of any shares in, or debentures of the
Company in pursuance of contracts or arrangements required to be
entered in the register maintained under section 301 of the Companies
Act, 1956.
(6) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A and 58AA or any other relevant provisions of the Companies Act 1956
and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
the deposits accepted from the public. No order has been passed by the
Company Law Board or any Court or any other Tribunal.
(7) In our opinion, the Company has an internal audit system
commensurate with the size & nature of its business.
(8) We have broadly reviewed the books of account maintained by the
Company, pursuant to the Companies (Cost Accounting Records) Rules,
2011 prescribed by the Central Government, under Section 209(1)(d) of
the Companies Act, 1956 and are of the opinion that, prima facie, the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of such records with a view to
determine whether they are accurate or complete.
(9) (i) According to the records of the Company, undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Value Added Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material
statutory dues have been generally regularly deposited with the
appropriate authorities.
(ii) 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, income tax,
wealth tax, service tax, sales tax, value added tax, custom duty,
excise duty and other material undisputed statutory dues were
outstanding, as at 31st March, 2014 for a period of more than six
months from the date they became payable.
(iii) According to the records of the Company and as per the
information and explanations given to us, the disputed statutory dues
as at 31st March 2014 that have not been deposited on account of
matters pending before appropriate authorities are as under:
Name of the
Statute Nature of the Dues Amount (H) Forum where dispute
is pending
U.P. Trade
Tax Act, 1948 Entry Tax 156030* Supreme Court
U.P. Trade
Tax Act, 1948 Entry Tax 666061* Supreme Court
U.P.Trade
Tax Act, 1948 Entry Tax 571833* Supreme Court
Central Excise
Act,1944 Excise Duty 1557031 CESTAT, New Delhi
* Net of amount deposited under dispute.
(10) The Company has no accumulated losses at the end of the financial
year ended on 31st March, 2014 and it has not incurred any cash losses
during the financial year ended on 31st March, 2014 and in the
immediately preceding financial year ended on 31st March, 2013.
(11) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institution, banks and
debenture holders.
(12) In our opinion and according to the information and explanations
given 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 nidhi / mutual
benefit fund / society. Therefore clause 4(xiii) of the Companies
(Auditor''s Report) Order 2003 is not applicable to the Company.
(14) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Therefore clause 4 (xiv)
of the Companies (Auditor''s Report) Order 2003 is not applicable to the
Company.
(15) In our opinion and according to the information & explanations
given to us, the Company has not given any guarantee for loans taken by
others from Bank or financial institutions. Therefore clause 4(xv) of
the Companies (Auditor''s Report) Order 2003 is not applicable to the
Company.
(16) In our opinion, and according to the information and explanations
given to us by the management, the term loans have been applied for the
purposes for which they were obtained.
(17) According to the information & explanations given to us and on an
overall examination of the Balance Sheet of the Company at the end of
the year, we report that, based on maturity profile of assets and
liabilities, the Company has used short term funds to the extent of
H205,776,690/- 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) The Company has not created any security or charge on the assets
of the Company in respect of Unsecured Non Convertible Debentures
issued.
(20) The Company has not raised any money by way of public issue during
the year.
(21) Based upon the audit procedures performed for the purpose of
reporting true and fair view of the financial statements and according
to the information and explanations given to us by the management, in
our opinion, no fraud on or by the Company has been noticed or reported
during the course of our audit.
FOR MEHROTRA RAKESH KUMAR & CO.,
Chartered Accountants,
(Registration No. 002978C)
(Deepak Seth)
Place: Kanpur Partner
Dated: 30th May, 2014 Membership No. 073081
