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GOENKA DIAMOND AND JEWELS LIMITED
ANNUAL REPORT 2011-2012
AUDITORS' REPORT
To
The Members of
Goenka Diamond and Jewels Limited
1. We have audited the attached Balance Sheet of Goenka Diamond and Jewels
Limited ('the Company') as at March 31, 2012 and also the Profit and Loss
account and the cash flow statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. 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 Companies Act, 1956' of India (the 'Act') 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 said Order
4. Without qualifying our opinion,
a) we draw attention to Note No. 37 to the financial statements, the
Company has not complied with the provisions of section 295 of the
Companies Act, 1956 in as much as it has not taken prior approval of the
Central Government in respect of guarantee amounting to Rs. 69.2 million
(amount outstanding as at March 31, 2012 - Rs. NIL) given on behalf of a
firm in which a Director of the Company is a partner with more than 25%
holding. The Company has made an application under Section 621A for
compounding the offenses. Pending the outcome of this application, no
adjustments have been made to the financial statements.
b) Accounting Policy 6(c) with regard to identification of specific item of
inventory and determination of estimated net realizable value which is
based on technical judgment of management and relied upon by us.
5. Further to our comments in the paragraph 3 above, we report that:
i. 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;
ii. 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;
iii. The balance sheet, the profit and loss account and the cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, the profit and loss account and the
cash flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the Companies
Act, 1956.
v. On the basis of the written representations received from the directors,
as on March 31, 2012, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2012 from
being appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts give the information required
by the Companies Act, 1956, 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, 2012;
b) In the case of the profit and loss account, of the profit for the year
ended on that date; and
c) In the case of cash flow statement, of the cash flows for the year ended
on that date.
For B. Khosla & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
FRN NO. 000205C FRN NO. 103523W
Sandeep Mundra Sumant Sakhardande
Partner Partner
Membership No. 75482 Membership No. 34828
Place: Mumbai Place: Mumbai
Date : May 29, 2012 Date : May 29, 2012
ANNEXURE TO AUDITORS' REPORT:
Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Goenka Diamond and Jewels Limited on the financial statements
for the year ended March 31, 2012.
(i) (a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed asset on basis of
available information.
(b) As explained to us, the fixed assets of the company have been
physically verified by the management during the year. In our opinion,
frequency of verification is reasonable, having regard to the size of the
Company and nature of its assets. No material discrepancies were noticed on
such physical verification.
(c) In our opinion and according to the information and explanations given
to us, a substantial part of fixed assets has not been disposed of by the
company during the year.
(ii) (a) As explained to us, inventories have been physically verified by
the management at reasonable intervals.
(b) In our opinion and according to information and explanations given to
us, the procedure of physical verification of inventories followed by the
management is reasonable and adequate in relation to the size of the
Company and nature of its business.
(c) On the basis of examination of inventory records, we are of the opinion
that the Company is maintaining proper records of inventories. As explained
to us, the discrepancies noticed on physical verification of stock as
compared to book records are not material and same have been properly dealt
with in the books of accounts.
(iii) As informed, the Company has not granted/taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956 and hence clauses
4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Companies
(Auditor's Report) Order, 2003 (as amended) are not applicable to the
company.
(iv) 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 purchase
of inventory, fixed assets and with regard to the sale of goods. During the
course of our audit, no major weakness has been noticed in the internal
control system in respect of these areas. During the course of our audit,
we have not observed any continuing failure to correct weakness in internal
control system of the company.
(v) (a) According to the information and explanations given to us, we are
of the opinion that the particulars of contracts or arrangements referred
to in section 301 of the Companies Act, 1956 that need to be entered into
the register maintained under section 301 have been so entered.
(b) In respect of the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs that have been entered
into during the financial year because of the unique nature of the items
involved and the absence of comparable prices, we are unable to comment
whether the transactions were made at prevailing market price at the
relevant time.
(vi) The company has not accepted any deposits from the public within the
meaning of Sections 58A and 58AA of the Act and the rules framed there
under.
(vii) In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to rules made by the Central Government for the
maintenance of records under Section 209(1)(d) of the Companies Act, 1956.
Based on such review and on the basis of an independent certificate from a
practicing Cost Accountant, we are of the opinion that prima facie, the
prescribed accounts and records have been maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, or employees' state insurance, income-tax,
sales-tax, wealth-tax, customs duty, cess have generally been regularly
deposited with authorities.
(b) 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, customs duty, excise duty, cess and other
undisputed statutory dues were outstanding, at the year end, for a period
of more than six months from the date they became payable.
(c) According to the information and explanation given to us, there are no
dues of income tax, sales-tax, wealth tax, service tax, customs duty,
excise duty and cess which have not been deposited on account of any
dispute.
(x) The Company does not have any accumulated losses at the end of the
year. Further, the company has not incurred cash losses during the
financial year covered by our audit and the immediately preceding financial
year.
(xi) In our opinion and according to the information and explanations given
to us, the Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security by
way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to
the Company.
(xiv) In our opinion, the Company is dealing in or trading in shares,
securities, debentures and other investments and maintains adequate records
of its transactions and contracts in shares , securities, debentures and
other investments. The company held shares, securities, debentures and
other investments in its own name.
(xv) The Company in previous year had given guarantee to the bankers on
behalf of a partnership firm in which the directors are interested and for
which prior approval of the Central Government under section 295 had not
been obtained when the guarantee was originally given. The said guarantee
stands withdrawn. During the year the company has not given any guarantee
for loans taken by others from Banks or financial institutions.
(xvi) The Company has not obtained any term loans during the year.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that no
funds raised on short-term basis have been used for long-term investment.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company had in the previous financial year raised money by way of
public issue. The management has disclosed end use of the money raised.
(xxi) During the course of our examination of the books and records of the
company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations given
to us, we have neither come across any instance of fraud by the company,
noticed or reported during the year, nor have we been informed of such case
by the management.
For B. Khosla & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
FRN NO. 000205C FRN NO. 103523W
Sandeep Mundra Sumant Sakhardande
Partner Partner
Membership No. 75482 Membership No. 34828
Place: Mumbai Place: Mumbai
Date : May 29, 2012 Date : May 29, 2012
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