TO THE MEMBERS OF
‘DECOLIGHT CERAMICS LIMITED’
Report on Audited Financial Statements:
We have audited the accompanying financial statements of DECOLIGHT CERAMICS LIMITED
(‘the Company”), which comprise the Balance Sheet as at March 31, 2015, and 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 matters stated in Section
134(5) of the Companies Act, 2013 (“the Act”) with respect to 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 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 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.
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 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 misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and
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 an adequate
internal financial controls system over financial reporting in place 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Opinion:
In our opinion and to the best of our information and according to the explanations
given to us, the financial statements read together with and subject to the notes thereon,
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, to the
extent applicable; subject to-
a) Unutilized fund of equity preferential issue privately placed lying in Inter
Corporate Deposits to the tune of Rs. 27.57/- crores is pending for renewal / receipt from
the respective parties. Refer Note 27(10);
b) The reasons pertaining to highly uncertainty about the Going Concern aspect of the
company. Refer Notes 27(11).
i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st
March, 2015;
ii. In the case of the Statement of Profit and Loss, of the loss of the Company for the
year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows of the Company for the
year ended on that date.
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 Act, we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
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 those books;
c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with
by this report are in agreement with the books of account, as submitted to us;
d) in our opinion, the aforesaid financial statements comply with the accounting
standards specified under Section 133 of the Companies Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014, to the extent applicable;
e) on the basis of written representations received from the directors, as on 31st
March, 2015 and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 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 Auditor’s Report in
accordance with Rule 11 of the Companies (Audit and Auditor’s) 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 as referred to in Note 27(12) to financial
statements, which may affect the financial position of the company.
ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, and as required on long-term contracts
including derivative contracts, except as referred to in Note 27(13) to the financial
statements.
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
|
For SVK & ASSOCIATES |
|
Chartered Accountants |
|
Firm No.: 118564W |
|
Shilpang V. Karia |
| Place: Morbi |
Partner |
| Date: 30th May, 2015 |
M. No.: 102114 |
ANNEXURE TO THE AUDITOR’S REPORT
(Referred to in paragraph 1 of our Report of even date on the Statement of Accounts of
DECOLIGHT CERAMICS LIMITED, for the year ended on 31st March, 2015)
i. FIXED ASSETS:
a. In our opinion, the company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed assets on the basis of
available information.
b. As explained to us, the fixed assets have been physically verified by the management
during the year in a phased periodical manner, which in our opinion is reasonable, having
regard to size of the company and nature of its assets, however certain material
discrepancies with respect to book records were noticed on such verification by bank / its
authorized representatives as mentioned in Note 27(11)(g) to the financial statements.
ii. INVENTORIES:
a. As explained to us, physical verification of inventory has been conducted by the
management at reasonable intervals. In our opinion, the frequency of verification is
reasonable in relation to its size and nature of business.
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 its size and nature of business.
c. In our opinion, the company is generally maintaining proper records of inventory in
relation to its size and nature of business. However, as reported by the bank, there were
certain material discrepancies noticed with respect to stock statements submitted to the
bank by the company compared to its physical verification of inventory carried out by bank
/ its authorized representatives. As explained to us by management of the company, there
were no material discrepancies on physical verification as compared to the book records.
However, the year end inventory of the company was NIL.
iii. LOANS:
a. According to the information and explanations given to us and on the basis of our
examination of the books of account, 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 Companies Act, 2013, during the year under review. Consequently, the
provisions of clause (iii) of the order are not applicable to the company.
iv. INTERNAL CONTROL:
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 nature
of its business with regard to purchase of inventory and fixed assets and with regard to
sale of goods and services. During the course of our audit, no major weakness has been
noticed in the internal control system in these areas.
v. DEPOSITS:
As explained to us, the company has not accepted any loans or deposits within meaning
of Section 73 to 76 of the Companies Act, 2013 read with Rule 2(b) of the Companies
(Acceptance of Deposit’s) Rules 2014, during the year under review.
vi. COST RECORDS:
According to the information and explanations provided by the management to us and to
the best of our knowledge, the Company is not engaged in production of any such goods or
production of any such services for which the Central Government has prescribed
particulars relating to utilization of material or labour or other items of cost. Hence
the provisions of section 148(1) of the Act do not apply to the Company.
vii. STATUTORY DUES:
a. According to the records of the company and on the basis of information and
explanation explained to us, undisputed statutory dues including provident fund,
employee’s state insurance, income-tax, sales-tax, wealth tax, service tax, custom
duty, excise duty, value added tax, cess to the extent applicable and any other statutory
dues applicable to it, were being generally deposited delayed / not deposited with the
appropriate authorities. Further according to information and explanation given to us,
undisputed statutory dues accounted and applicable to the company as per the opinion of
the management, outstanding as at 31st March, 2015 for a period of more than 6 months from
the date they become payable are Central Excise Duty Rs. 0.64 Lacs, Value Added Tax &
Central Sales Tax of Rs. 6.59 lacs, TDS of Rs. 0.89 Lacs, Provident Fund Rs. 0.94 lacs,
and Professional tax of Rs. 0.11 lacs.
b. According to the information and explanation available to us, details of dues of
Excise Duty, VAT and Cess which have not been deposited on account of any dispute with
appellate authority, are given below:
| Sr. No. |
Name of the statue |
Nature of dues |
Amount under dispute Rs. In lacs |
Period to which amount relates |
Forum where dispute is pending |
| 1. |
The Central Excise Act 1944* |
Excise duty including interest and penalty as applicable |
4.65 |
2004-05 |
Tribunal |
| 2. |
The GVAT Act, 2003 |
Central Sales Tax (excluding applicable interest and penalty |
146.90 |
2009-10 |
Commissioner (Appeals) |
| 3 |
The GVAT Act, 2003 |
Central Sales Tax (excluding applicable interest and penalty) |
1631.29 |
2010-11 |
Commissioner (Appeals) |
The excise department had issued certain show cause notices amounting to tax liability
of Rs. 493.96 lacs, which are pending at adjudication level and amount paid under protest
for the same amounting to Rs. 408.79 lacs.
* However the company has paid under protest Rs. 2.60 lacs for the above.
c. As per the information and explanation available to us and to the best of our
knowledge, there were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
viii. CASH LOSSES AND ACCUMULATED LOSSES:
The company has accumulated losses of Rs. 6066.84 Lacs which have exceeded fifty
percent of its net worth as at the end of the financial year under review. The company has
incurred cash loss in the year under review to the tune of Rs. 2329.80 Lacs and it has
incurred cash loss of Rs. 3045.16 Lacs in the immediately preceding financial year.
ix. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:
Based on our audit procedures and as per information and explanation given to us by the
management of the company, we are of the opinion that company has defaulted in repayment
of dues to banks during the year under review. The short term borrowings from the banks by
the company have been classified as Non Performing Assets (NPA) w.e.f. 28th October, 2013.
Details of default at year end are as follows:
| Period of Default ‘ |
Amount (Rs. In lacs) |
| Less than 30 days |
0.21 |
| 30 to 90 days |
0.41 |
| More than 90 days (Excluding uncharged interest of Rs. 791.21 Lacs) |
3434.85 |
x. GUARANTEE FOR LOANS TAKEN BY OTHERS:
According to the information and explanations given to us, the company has not given
any guarantee for loans taken by others from any bank or financial institutions.
xi. TERM LOANS:
Based on our audit procedures and according to information and explanations given to
us, the existing term loans have been applied for the purpose for which they were
obtained.
xii. FRAUD:
Based upon the audit procedures performed and as per the information and explanation
given to us by the management, we report that no fraud on or by the company has been
noticed or reported during the course of our audit, except plant & machineries not in
use having book value of Rs. 159.53/- Lacs have been sold at Rs. 40.96/- Lacs without
taking prior permission of the bankers to whom such plant & machineries were
hypothecated. As explained by the management, they have satisfactorily replied to the
bankers in this aspect.
|
For, SVK & ASSOCIATES |
|
Chartered Accountants |
|
Shilpang V. Karia |
|
Partner |
| Place: Morbi |
M. No.: 102114 |
| Date: 30th May, 2015 |
Firm No.: 118564W |
+91-9892691696
