Report on the Financial Statements
We have audited the accompanying Financial Statements of MERCURY
LABORATORIES LIMITED (the Company) which comprise the Balance sheet
as at 31st March, 2014 and the Statement of Profit & Loss for the year
ended on that date annexed thereto 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
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.
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 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.
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
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 (Auditors Report) Order, 2003 (the
order) and Companies (Auditors Report) Order (Amendment), 2004
(hereinafter collectively referred to as CARO) issued by the Central
Government in terms of section 227 (4A) of the Companies Act, 1956, we
enclose in the Annexure, a statement on the matters specified in
paragraph 4 & 5 of the said Order
2. As per the requirements under Section 227 (3)of the Act, we report
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
b) In our opinion, proper books of accounts as required by the law have
been kept by the Company, so far as appears from our examination of the
c) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts of the Company;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss
annexed thereto and the Cash Flow Statement comply with the Accounting
Standards notified under the Companies Act, 1956 read with the General
Circular No.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 31st March, 2014, and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2014 from being appointed as a director of the Company under clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956.
ANNEXURE TO AUDITORS'' REPORT
(Referred to in paragraph 1 or our report of even date on the accounts
for the year ended 31st March 2014 of Mercury Laboratories Limited)
(i) (a) The Company has maintained proper records showing full
particulars including Quantitative Details and situation of the Fixed
Assets for the last Ten years. As informed to us, the Company is in the
process of updating its old records.
(b) All the assets have not been physically verified by the management
during the year but there is a regular program of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. As informed to us, no material
discrepancies were noticed on such verification.
(c) During the year, the company has not disposed off any substantial
fixed asset affecting the going concern.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
(b) 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) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material and have been
adequately dealt within the books of accounts.
(iii) (a) The Company has not granted any secured or unsecured loan to
Companies , Firms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
(b) The Company has taken unsecured loans from 5 persons covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 1,38,97,432/- and the
year-end balance of the loans was Rs. 1,38,97,432/- (RY. 47,63,008/-).
(c) The terms and conditions on which the loans are taken from the
parties listed in the registers maintained under Section 301 are not,
prima facie, prejudicial to the interest of the company.
(d) The Company is regular in paying the interest charges and repayment
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in the
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the particulars of contracts or arrangements referred
to Section 301 of the Act have been entered into the register required
to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 and
exceeding the value of five lakh rupees in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance
of Deposits) Rules, 1975 with regard to the deposits accepted from the
(vii) In our opinion, the company has an internal audit system
commensurate with the size of the company and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been maintained.
(ix) (a) According to the records of the Company, the Company is
regular in depositing with appropriate authorities undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Income Tax, Sales Tax, Custom Duty, Excise Duty, Service Tax, Cess and
material other statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Customs Duty, Excise Duty, Service Tax, Cess and other applicable
material statutory liabilities were outstanding, as at 31st March, 2014
for a period of more than six months from the date they became payable.
(b) According to the records of the company, there are no dues of Sales
Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Cess or other
applicable statutory liabilities which have not been deposited on
account of any dispute except following :
Statute Nature of Dues Amount ( Rs.) Period Forum
Sales Tax GST on 89391.00 1991 -92 Tribunal
Service Wrong Availment 11,47,688.00 2005-08 Commissioner
Tax of Credit Appeals
10,80,988.00 2008-13 Additional
Excise Non Payment of 104,501.00 2008-09 CESTAT,
Duty on Expired Ahmadabad
Excise Excise Duty on 536,791.00 2005-06 CESTAT,
(x) The Company has no accumulated losses. The company has not incurred
any cash losses during the financial year covered by our audit and the
immediately preceding financial year.
(xi) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to financial
institutions or banks. The Company has not issued any debentures.
(xii) As per information given to us, during the year under report, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, considering the nature of activities carried on
by the Company during the year, the Company is not a Chit fund or a
Nidhi / mutual benefit fund / society. Therefore, the provisions of
Clause 4 (xiii) of CARO, 2003 are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments. Accordingly, the
provisions of Clause 4 (xiv) of CARO, 2003 are not applicable
(xv) According to the records of the company and based on information &
explanation given to us, the company has not given any Guarantee for
Loans taken by others from Banks or Financial Institutions.
(xvi) No term loans have been obtained during the year.
(xvii) On the basis of review of Utilization of fund which is based on
overall examination of Balance Sheet of the Company, related
information as made available to us and as represented to us by
management, we report that fund raised on short term basis have not
been used for long term investment.
(xviii) The company has not made preferential allotment of shares to
parties and companies covered in the register maintained undersection
301 of the Companies Act, 1956.
(xix) During the period covered by our audit report, the company has
not issued any debentures.
(xx) The Company has not raised any money through public issues during
the year under report.
(xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
FRN NO. 106928W
Place : VADODARA CA ANIL L. SHAH
Date :26thJuly, 2014 PARTNER
(MEMBERSHIP NO. 35309)