| We have audited the accompanying financial statements of BLOSSOM
INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet
as. at 31st March, 2014, the Statement of Profit and Loss and 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 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") (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th Septernber, 2013 of the Ministry of Corporate
Affairs) and in accordance with the accounting principles generally
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.
Auditors' 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 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 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 the accounting
policies used and the reasonableness of the accounting estimates made
by the 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 aforesaid 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 3151 March, 2014;
(b) in the case of the Statement of Profit and Loss, 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.
Emphasis of Matter
Attention is invited to Note no 24.1 (i) (c) regarding non provision of
service tax estimated#at Rs. 286,030,616/- (excluding interest and
penalty) for the period from 23rd September, 2009 to 30th June, 2012
for the reasons stated therein. During the previous year, the Company
had paid Rs. 209,402,036/- (including interest of Rs. 32,750,955/-)
under protest. In an earlier year, the Company had filed a writ
petition with the Hon'ble High Court of Bombay which was admitted.
Pending the hearing of the Writ by the Hon'ble High Court, no effect
has been considered in the financial statements.
Our opinion is not qualified in respect of this matter.
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 in terms of Section 227(4A) of
the Act, 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 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
those books.
(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 Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs).
(e) On the basis of the written representations received from the
directors as on 31 * March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31n March, 2014
from being appointed as a director in terms of Section 274( I )(g) of
the Act.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph I of Report on Other Legal and Regulatory
Requirements of our report of even date) Having regard to the nature of
the Company's business, clauses (vi), (x), (xi), (xii), (xiii), (xiv),
(xv), (xviii), (xix) and (xx) of paragraph 4 of the Order are not
applicable.
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) Physical verification of fixed assets was carried out during the
year by the management, the frequency of which in our opinion is
reasonable, having regard to the size of the company and the nature of
its assets. According to the information and explanations given to us,
no material discrepancies were noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company.-
(ii) 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 explanation
given to us, the procedures of physical verification of inventories
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
verification.
(iii) (a) The Company has neither granted any loans, secured or
unsecured, to companies, firms or other parties listed in the Register
maintained under Section 301 of the Companies Act, 1956.
(b) According to the information and explanations given to us, the
Company has taken unsecured loan of Rs.48,000,000/- during the year
from a company covered in the register maintained under Section 301 of
the Companies Act, 1956. The maximum amount involved during the year
was Rs. 300,000,000/- and the year-end balance of such loan taken was
Rs. 217,500,000/-.
(c) The rate of interest and other terms and conditions of such loans
are, in our opinion, prima facie not prejudicial to the interests of
the Company.
(d) No principal amount has fallen due for repayment during the year as
per agreement between the parties. The Company has been regular in the
payment of interest.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased and sold are of special nature and their prices cannot be
compared with alternative quotations, there is an adequate internal
control system commensurate with the size of the Company and nature of
its business for the purchase of inventory and fixed assets and with
regard to the sale of goods.
During the course of our audit, we have not observed any major
weaknesses in such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered,
(b) In our opinion and according to the information and explanations
given to us, having regard to the comment in (iv) above, the
transactions made in pursuance of such contracts or arrangements and
exceeding the value of Rs.5 lakhs in respect of any party during the
year have been made at prices which are reasonable having regard to the
prevaling market prices at the relevant time.
(vi) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the Mangement
have been commensurate with the size of the Company and the nature of
its business.
(vii) 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 the records with a view to
determining whether they are accurate or complete.
(viii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including provident fund, investor education and protection fund,
employees' state insurance, income-tax, sales tax, wealth tax, service
tax, custom duty, excise duty, cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of income-tax,
wealth tax, custom duty, excise duty, cess and other material statutory
dues in arrears as at 31 st March, 2014 for a period of more than six
months from the date they became payable.
(c) Details of dues of income-tax, sales tax, wealth tax, service tax,
custom duty, excise duty and cess which have not been deposited as on
31st March, 2014 on account of disputes are given below:
Name of Nature of Forum where Period to
the Statute Dues Dispute is which the
pending amount relates
Finance Act, Service Tax Hon'bleHigh FY 2009-10,
1994 Court of Bombay 2010-11,
2011-12,
2012-13
Bihar Value Sales Tax Commissioner of F.Y. 2013-14
Added Tax Comercial Taxes Act, 2005
Name of the Statute Amount involved (Rs.)
Finance Act 1994 Rs. 286,030,616 (refer (a) below)
Bihar value added tax Rs. 2,194,766 (refer (b) below)
Notes:
(a) During the previous year, the Company had paid Rs. 176,651,081/-
under protest against the above disputed dues.
(b) During the year, the Company has paid Rs. 2,194,766/- under protest
against the above disputed dues.
(ix) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(x) In our opinion and according to tbe information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xi) 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.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
R.A.Banga
Partner
(Membership No. 37915)
Mumbai, 6th June, 2014
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