We have audited the accompanying Standalone financial statements of
Refnol Resins and Chemicals Limited (the Company), which comprise the
Balance Sheet as at March 31,2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these standalone 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 principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
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 judgments
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 the accounting records, 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 standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) 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 the 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 that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the 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 financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as
at March 31, 2015, and its loss and its cash flows for the year ended
on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
Note 27 in the financial statements which indicates that the company
has accumulated losses and its net worth has been fully eroded, the
Company has incurred a net cash loss during the current and previous
years and, the Company''s current liabilities exceeded its current
assets as at the balance sheet date. These conditions, along with other
matters set forth in Note 27, indicates the existence of a material
uncertainty that may cast significant doubt about the Company''s ability
to continue as going concern. However, the financial statements of the
Company have been prepared on going concern basis for the reasons
stated in the said Note.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1] As required by the Companies (Auditor''s Report) Order, 2015 (the
Order), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Companies Act, 2013, we give in
the Annexure a statement on the matters specified in paragraphs 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
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) The going concern matter described in sub-paragraph under the
Emphasis of Matters paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the
directors as on March 31,2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2015
from being appointed as a director in terms of Section 164(2) of the
(g) With respect to the other matters to be included in the Auditor''s
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 has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Notes 25 to the
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under Report on Other Legal And Regulatory
Requirements section of our report of even date of Refnol Resins and
Chemicals Limited on the Standalone Financial Statements for the year
ended March 31,2015)
01. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets;
(b) The Company has a program of verification of fixed assets to cover
all the assets in a phased manner over a period of three years which,
in our opinion, is reasonable having regard to the size of the Company
and nature of its assets. Pursuant to the program, certain fixed
assets were physically verified by the Management during the year.
According to the information and explanations given to us, no material
discrepancies were noticed on such verification.
02. In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business;
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
03. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties covered in the Register maintained under Section
189 of the Act.
04. 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 with regard
to purchases of inventory and fixed assets and the sale of goods and
services. During the course of our audit, we have not observed any
major weaknesses in such internal control system.
05. According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year in
terms of the provisions of Sections 73 and 76 or any other relevant
provisions of the Act.
06. In our opinion and according to the information and explanations
given to us, the Companies (Cost Records and Audit) Rules, 2011 as
amended and prescribed by the Central Government under sub-section (1)
of section 148 of the Companies Act, 2013, the Company is not required
to maintain prescribed cost records.
07. In respect of statutory dues:
(a) According to the information and explanations give to us and the
records of the company examined by us, in our opinion, the company is
not regular in depositing the undisputed statutory dues including
Provident Fund, Employees'' State Insurance, Income Tax, Value Added
Tax, Service Tax, Custom Duty, Excise Duty, Cess and other Material
statutory dues as applicable with the appropriate authorities.
(b) There were no un undisputed amounts payable in respect of statutory
dues including Provident Fund, Employees'' State Insurance, Income Tax,
Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
Material statutory dues as applicable with the appropriate authorities
except Penalty of late E-filing of TDS which remain unpaid exceeding
six months as on 31st March 2015 is Rs. 2.31 Lacs.
(c) There are no disputed statutory dues that have not been deposited
on accounts of matter pending before appropriate authorities.
08. Due to accumulated losses, Company''s Net Worth has been fully
eroded. Company has incurred cash loss of Rs.35.57 Lacs in the current
financial year and Rs.168.91 Lacs in the preceding financial year.
09. In our opinion and according to the information and explanations
given to us, and based on the records of the Company, the Company has
not defaulted in the repayment of dues to financial institutions and
10. 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.
11. In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
12. To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year nor have we
been informed of such case by the management.
For G. P. Kapadia & Co.
(Registration No. 104768 w)
Uday R. Parikh
Place : Ahmedabad Partner
Date : 13th May, 2015 Membership No. : 10217