To
The Members of
SHREE GANESH JEWELLERY HOUSE (I) LIMITED
(Formerly Known as Shree Ganesh Jewellery House Limited)
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of SHREE GANESH
JEWELLERY HOUSE (I) LIMITED ("the Company"), which comprise the Balance
Sheet as at 31st March, 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.
Managements Responsibility for the Standalone Financial Statements
The Companys 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.
Auditors Responsibility
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 there under.
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 Companys 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
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 Companys Director, 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 qualified audit opinion on the standalone financial statements.
Basis for Qualified opinion
(i) Note No. 52 regarding fixed Deposits amounting to Rs 3,031.08 Lacs pledged as
security with axis bank against cash credit sanctioned was adjusted with cash credit
balance in the company’s book on maturity of the fixed deposits. However as per cash
credit account statement furnished by the bank, fixed deposits figure was not adjusted
with the cash credit account balance. Thus, cash credit balance as per bank statement
showed excess by Rs 3,031.08 lacs;
(ii) Note No. 53 regarding Cash credit balance of Dhanalaxmi bank was Rs 1,827.27 Lacs
and Rs 91.59 Lacs reflecting less balance in Company’s books. The Company had
contested the excess amount claimed by the bank in the High Court of Kolkata and had
received a stay order on the excess claim made by the bank;
(iii) Note No.7 regarding Cash Credit A/c (Account No: 911030049091869) balance of Rs
98,641.67 Lacs as on March 31, 2015 in which impact of Rs 18.20 Lacs debited by Bank on
dated 31st January, 2014 and Rs 290.27 Lacs credited by Bank on 28th August, 2014 in the
CC account has not been considered. These are subject to reconciliation and consequential
impact if any, presently not ascertainable;
(iv) Note No.7 includes Short-term borrowings of Rs 44,655.46 Lacs have not been
confirmed as on March 31, 2015, hence we are unable to comment the consequential impact on
confirmation/ reconciliation of such balances if any,
We further report that the overall impact of the matters reported by us in the
aforesaid paragraphs cannot be determined and commented.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of matter described in the Basis for Qualified Opinion
paragraph, 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 31st March, 2015, and its Loss and its cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to the following notes :
a) Note No.33 Contingent Liability, which describes the uncertainty related to the
outcome of the demand raised against the Company by Sales Tax authorities;
b) Note No. 51 and 54 in the financial statements regarding preparation of these
accounts on going concern basis and is facing financial crunch with its inability to meet
the financial obligations. The Company had applied for Composite Corporate Debt
Restructuring with the banks to mitigate the above which was withdrawn by the banks in the
consortium meeting held on 22nd January, 2015. As stated the company had again requested
for reconsideration of restructuring proposal by all the lenders. These facts have been
disclosed in above referred notes by the management, in view of which, the accounts have
been continued to be prepared under the going concern assumption.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditors Report) Order, 2015 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of Section 143 of
the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and
4 of the Order.
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 purpose of our audit, except as
reported in clause (iii) & (iv) of the Basis for Qualified Opinion Paragraph above;
b) Except the effects of matters referred in Basis for Qualified Opinion Paragraph
above, 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 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 matters described in Basis for Qualified Opinion paragraph and Emphasis of
Matters paragraph above, in our opinion, may have an adverse effect on the functioning of
the Company.
f) On the basis of written representations received from the directors as on March 31,
2015, and taken on record by the Board of Directors, except two directors, none of the
other directors is disqualified as on March 31, 2015 from being appointed as director
under the sub-section (2) of Section 164 of the Companies Act.
g) The qualification relating to the maintenance of accounts and other matters
connected therewith, are as stated in the Basis for Qualified Opinion Paragraph and
Emphasis of Matters paragraph above.
h) With respect to the other matters to be included in the Auditors 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 Note No.33(i)& (ii))
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
|
For CHATURVEDI & PARTNERS |
|
Chartered Accountants |
|
Firm Registration No.307068E |
|
Sd/- |
|
Pratik Niyogi |
| Date: 30th May, 2015 |
Partner |
| Place: Kolkata |
Membership No.066514 |
Annexure to the Auditors Report
(Referred to in Paragraph 1 of "Other Legal and Regulatory requirements" of
our Audit Report)
i) In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars including
quantitative details and situation of its fixed assets.
b) The Company has a regular program of physical verification of fixed assets by which
fixed assets are verified in a phased manner over a period of three years. In accordance
with this program, certain fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the company and the
nature of its assets.
ii) In respect of Inventories:
a) The inventories have been physically verified by the management as at year end. In
our opinion, the frequency of such verification is reasonable.
b) In our opinion, and according to the information and explanations given to us, 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) In our opinion, and according to the information and explanations given to us, the
Company is maintaining proper records of its inventories and no material discrepancies
noticed on such physical verification.
iii) The Company has granted loans to its subsidiary companies covered in register
maintained under Section 189 of the Companies Act, 2013. The maximum amount involved
during the year and the year-end balance was INR. 6,763.51 Lacs and INR. 6,763.51 Lacs
respectively.
a) In our opinion and according to the information and explanations given to us, the
rate of interest and other terms and conditions on which loans have been granted to its
subsidiary companies and listed in the register maintained under section 189 of the
Companies Act, 2013 are not prima facie, prejudicial to the interest of the Company.
b) According to the information and explanation given to us, loans granted and interest
thereon are recoverable on demand. There are no stipulations made for the recovery of the
loan. Hence we cannot comment on the regularity of receipt of principal amounts and
interest thereon.
c) Based on the information and explanations, there is no overdue amount outstanding at
the end of the year in respect of the above said loans.
iv) 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, fixed assets
and with regard to the sale of goods and services. We have not observed any major weakness
in internal control system during the course of the audit.
v) According to the information and explanations given to us, the Company has not
accepted any deposits from the public within the meaning of directives issued by the
Reserve Bank of India and provisions of Sections 73 to 76 or any other relevant provisions
of the Companies Act, 2013 and the rules framed there under.
vi) We have broadly reviewed the cost records maintained by the Company pursuant to the
Rule made by the Central Government for the maintenance of cost records under Section
148(1) of the Companies Act, 2013 and we are of the opinion that prima facie the
prescribed accounts and records have been made and maintained. However, we have not made a
detailed examination of the cost records with the view to determine whether they are
accurate or complete.
vii) a) According to the information and explanations given to us and on the basis of
our examination of the books of accounts, the Company is generally been deposited
regularly the undisputed statutory dues including Provident Fund, Employee State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of
Excise, Value Added Tax, Cess and any other statutory dues with the appropriate
authorities except delay in some cases and some of the amounts are still not paid as
detailed below:-
Service Tax -Rs 2.20 Lacs and
Sales Tax -Rs 94.68 Lacs
Except West Bengal Value Added Tax aggregating of 41.34 Lacs, there were no
un-disputed statutory dues as at the end of the year concerned outstanding for a period of
more than six months from the date they became payable.
b) According to the information and explanations given to us, there were no dues of
Wealth Tax, Custom Duty, and Cess which have not been deposited with the appropriate
authorities on account of any dispute. Based on the information and explanations
available, the following Sales Tax dues have not been deposited with the appropriate
authorities on account of Dispute:-
| Sl. No. Name of the Status |
Nature of Dues |
Amount (Rs In Lacs) |
Period to which the Amount Relates |
Forum Where the dispute is Pending |
| 1. West Bengal Sales Tax Act/ Central Sales Tax Act |
Claim of Export rejected by Appellate Authority on ground of non accepting Form 12A on
quarterly basis but the commercial taxes authority issued it on quarterly basis. |
291.07 |
2006-07 |
Revisional Board, Sales tax Kolkata (South Circle) |
| 2. West Bengal Sales Tax Act/ Central Sales Tax Act |
Export Sales and Input Tax Credit disallowed and Gross Turnover enhanced by 63%. |
1,807.33 |
2007-08 |
Appellate Authority, Sales Tax Kolkata (South Circle) |
| 3. West Bengal Sales Tax Act/ Central Sales Tax Act |
Input tax disallowed due to Purchase / Sale from the same party and further, Purchase
tax levied on fixed assets purchased during the year. |
27.44 |
2008-09 |
Appellate Authority, Sales Tax Kolkata (South Circle) |
| 4. West Bengal Sales Tax Act/ Central Sales Tax Act |
Tax on sales at branch outside the State of West Bengal @ 12.5% and CST sales taxed @
1% thereon. |
519.46 |
2009-10 |
Appellate Authority, Sales Tax Kolkata (South Circle) |
| 5. West Bengal Sales Tax Act/ Central Sales Tax Act |
Disallowance of export sale and purchase tax on Unregistered purchase. |
2,078.83 |
2010-11 |
Senior Joint Commissioner Kolkata (South Circle) |
| 6 West Bengal Sales Tax Act/ Central Sales Tax Act |
Disallowance of "Form F |
83.18 |
2011-12 |
Appellate Authority, Sales Tax, Kolkata (South Circle) |
c) According to the information and explanations given to us, there is no amount
required to be transferred to investor education and protection fund in accordance with
the relevant provisions of the Companies Act,1956 (1 of 1956) and rules made there under
during the year.
viii) The Company has no accumulated losses at the end of the financial year and has
incurred cash losses amounting to Rs 76,037.33 Lacs during current financial year. The
Company had incurred cash losses in the immediately preceding financial year also.
ix) In our opinion and according to the information and explanations given to us, the
Company has defaulted in repayment of dues to its banker and debenture holders. The
Company has applied for reconsideration of Composite Corporate Debt Restructuring as
stated by the management in Note No.51 of the financial statements.
x) In our opinion and according to the information given to us, in respect of the
guarantee given by the Company for the loans taken by others from a bank, the terms and
conditions thereof are not, prima facie, prejudicial to the interest of the company.
xi) In our opinion and according to the information and explanations given to us, the
term loans have been applied for the purpose for which they were raised.
xii) As represented to us by the management and based on our examination of the books
and records of the Company in accordance with the generally accepted auditing practices in
India, we have neither come across any material fraud on or by the Company noticed or
reported during the year nor we have been informed of any such case by the management that
causes the financial statements to be materially misstated.
|
For CHATURVEDI & PARTNERS |
|
Chartered Accountants |
|
Firm Registration No.307068E |
|
Sd/- |
|
Pratik Niyogi |
| Date: 30th May, 2015 |
Partner |
| Place: Kolkata |
Membership No.066514 |
+91-9892691696
