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SVC Resources

BSE: 512449|ISIN: INE254H01044|SECTOR: Mining & Minerals
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SVC Resources is not listed on NSE
Mar 14
Auditor's Report (SVC Resources) Year End : Mar '15
We have audited the accompanying financial statements of SVC Resources
 Limited (''the Company''), which comprise the Balance Sheet as at March
 31, 2015, the Statement of Profit and Loss 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
 
 The Company''s Board of Directors is responsible for the preparation of
 these financial statements in terms of the requirements of the
 Companies Act, 2013 (''the Act'') 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.
 The respective Board of Directors of the Company are responsible for
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the respective assets of the
 Company and for preventing and detecting frauds and other
 irregularities; the selection and application of appropriate accounting
 policies; making judgements and estimates that are reasonable and
 prudent; and the 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, which have been used for
 the purpose of preparation of these financial statements by the Board
 of Directors of the Company.
 
 Auditor''s Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit.
 
 While conducting the 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 thereunder.
 
 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.  Page 37 of 51
 
 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 and presentation 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 control 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 Board
 of Directors, as well as evaluating the overall presentation of the
 financial statements.
 
 Basis for Disclaimer of Opinion
 
 So far as information and explanations given to us, the Old Management
 of the Company was removed in an Extraordinary General Meeting held on
 January 11, 2014 and supported by the an order of the Company Law
 Board, Delhi dated April 4, 2014.
 
 Thereafter, the Old Management did not hand over books of accounts,
 statutory records, minutes books, bank statements, subsidiary details
 and any other records/documents to the New Management. Since then, the
 New Management of the Company is engaged in a legal battle with the Old
 Management. As such, the Company does not have books of accounts or any
 other records.
 
 In this regard, the Company had filed petition with the Company Law
 Board, Delhi. The case was decided in favour of the New Management on
 June 4, 2015. However, the New Management are yet to receive the books
 of accounts and other records of the company from the Old Management.
 
 We have not been able to access the books of accounts and other records
 of the company; the elements making up the Balance Sheet and the
 Statement of Profit and Loss and Cash Flow.
 
 Disclaimer of Opinion
 
 Because of the significance of the matters described in the Basis of
 Disclaimer of Opinion paragraph, we have not been able to obtain
 sufficient appropriate audit evidence to provide a basis for an audit
 opinion. Accordingly, we do not express an opinion on the financial
 statements.
 
 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 Section
 143 (11) of the Act, based on the comments in the auditors'' report of
 the Company, 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, to the extent
 applicable, that:
 
 a.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we have sought but not obtained any of
 the information and explanations which to the best of our knowledge and
 belief were necessary for the purposes of our audit of the financial
 statements.
 
 b.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether proper books of account as required by law relating to
 preparation of the financial statements have been kept.
 
 c.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we are able to opine on whether the
 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow
 Statement dealt with by this Report are in agreement with the relevant
 books of account maintained for the purpose of preparation of the
 financial statements.
 
 d.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the 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.  On the basis of the written representations received from the
 Directors of the Company as on March 31, 2015, taken on record by the
 Board of Directors of the Company, none of the Directors of the Company
 is 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
 Auditor''s) Rules, 2014:
 
 i.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has disclosed the impact of pending litigations on
 the financial position in its financial statements as of March 31,
 2015.
 
 ii.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has made provisions in its financial statements, as
 required under the applicable law or accounting standards, for material
 foreseeable losses on long term contracts.
 
 iii. Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether there has been any delay in transferring amounts, required to
 be transferred, to the Investor Education and Protection Fund by the
 Company
 
 Annexure to Independent Auditors'' Report
 
 (Referred to in paragraph 1 under Report on Other Legal and Statutory
 Requirements section of our report of even date)
 
 1.  In respect of the fixed assets of the Company:
 
 a.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the respective entities have maintained proper records showing
 full particulars, including quantitative details and situation of fixed
 assets.
 
 b.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the fixed assets were physically verified during the year by
 the Management of the respective entities in accordance with a regular
 programme of verification which provides for physical verification of
 the fixed assets at reasonable intervals.
 
 2.  In respect of the inventories of the Company:
 
 a.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the inventories were physically verified during the year by the
 Management of the Company at reasonable intervals.
 
 b.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the procedures of physical verification of inventories followed
 by the respective Management were reasonable and adequate in relation
 to the size of the Company and the nature of their business.
 
 c.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has maintained proper records of its inventories.
 
 3.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has granted any loans, secured or unsecured, to
 companies, firms or other parties covered in the Registers maintained
 under Section 189 of the Act by the respective entities.
 
 4.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether there is an adequate internal control system commensurate with
 the size of the Company and the nature of their business respectively
 with regard to purchase of inventory and fixed assets and the sale of
 goods and services.
 
 5.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has accepted deposits during the year and do not
 have any unclaimed deposits.
 
 6.  The provisions of clause 3 (vi) of the Order are not applicable to
 the Company as the Company is not covered by the Companies (Cost
 Records and Audit) Rules, 2014.
 
 7.  According to the information and explanations given to us, in
 respect of statutory dues of the Company:
 
 a. Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on whether
 the Company has generally been regular in depositing undisputed
 statutory dues, including Provident Fund, Employees'' State Insurance,
 Income Tax, Sales Tax and Value Added Tax, Wealth Tax, Service Tax,
 duty of Customs, duty of Excise, Cess and other material statutory dues
 applicable to it with the appropriate authorities.page 40 0f 51
 
 b.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether there were no undisputed amounts payable in respect of
 Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax and
 Value Added Tax, Wealth Tax, Service Tax, duty of Customs, duty of
 Excise, Cess and other material statutory dues in arrears as at March
 31, 2015 for a period of more than six months from the date they became
 payable.
 
 c.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether there were no dues of Income Tax, Sales Tax, Value Added Tax,
 Service Tax, Wealth Tax, duty of Customs, duty of Excise and Cess which
 have not been deposited as at March 31, 2015 on account of dispute.
 
 d.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has been regular in transferring amounts to the
 Investor Education and Protection Fund in accordance with the relevant
 provisions of the Companies Act, 1956 and Rules made thereunder within
 time.
 
 8.  The Company has accumulated losses. The Company has incurred cash
 losses during the financial year covered by our audit and in the
 immediately preceding financial year.
 
 9.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has defaulted in repayment of dues to a bank during
 the year and did not have any amount outstanding to financial
 institutions or debenture holders.
 
 10.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has given guarantees for loans taken by others from
 banks and financial institutions. Therefore, the provisions of the
 clause 3 (x) of the Order are not applicable to the Company.
 
 11.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether the Company has availed any term loan during the year.
 
 12.  Due to the effects of the matter described in the Basis for
 Disclaimer of Opinion paragraph, we do not express an opinion on
 whether any fraud on or by the Company has been noticed or reported
 during the year.
 
 However, suspected frauds were detected in the previous year''s audit of
 the Company which, when confirmed, can have significant effect on the
 financial statements of the Company. We reproduce the observations made
 in the previous year''s Audit Report;
 
 The order of the Company Law Board dated June 4, 2015 has created
 doubts over the genuineness of the balances of loans and advances taken
 and given, creditors, debtors and cash.  We suspect that the Old
 Management conducted fraudulent activities against the Company. The
 Company has already filed a complaint against the Old Management with
 the Economic Offences Wing (EOW). The exact nature of the frauds is not
 ascertainable because of the significance of the matters described in
 the Basis of Disclaimer of Opinion Paragraph.
 
                                           For D N Khatri & Associates
                                           Chartered Accountants
                                           Firm Registration No. 133251W
 
 Place Mumbai                              Deepesh Khatri
                                           Proprietor
 Date September 2, 2015                    Membership No. 143579
 
 
 
 
 
Source : Dion Global Solutions Limited
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