enchante jewellery ltd share price Auditors report
ENCHANTE JEWELLERY LIMITED
ANNUAL REPORT 2004-2005
AUDITORS REPORT
TO
THE MEMBERS OF
ENCHANTE JEWELLERY LIMITED
We have audited the attached Balance Sheet of Ms. Enchante Jewellery Ltd.
as at 31st March 2005 and also the Profit & Loss Account for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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 the management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis of our opinion.
As required by the Companies (Auditors Report) order, 2003 issued by the
Central Government in terms of sub section (4A) of section 227 of the
companies Act, 1956 we enclose in the annexure a statement on the matters
specified in paragraph 4 and 5 of the said order. Further to our comments
in the annexure referred to 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 accounts as required by law have been
kept by the company, so far as appears from our examination of those books.
iii) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, the Profit & Loss Account and Cash
Flow Statement dealt with by this report, comply with the Accounting
Standards referred to in sub-section 3(C) of section 211 of the Companies
Act, 1956 to the extent applicable to the company.
v) On the basis of the written representations receives from the directors
as on 31.3.2005 and taken on record by the Board of Directors, we report
that none of the directors is disqualified as on 31st March 2005 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the companies Act, 1956.
vi) Attention is invited to:
a) The preparation of accounts going on concern basis, despite the company
being a sick industrial company, and incurring operational losses
continuously.
vii) a) Note no. 6 of part B of schedule K regarding writing back of
Rs 624.65 lakhs in the Profit & Loss Account during the financial year
2002-03 and non provision of interest on amount payable to SBI (amount
unascertained), in respect of Loan of State Bank of India. The bank has
denied for the OTS proposal as not being acceptable by the banks
appropriate authority, in view of the sacrifice involved on the part of the
bank.
b) Note no. 14 of part B of Schedule K regarding accounting of liability
for bonus on payment basis. (amount unascertained).
We further report that the profit for the year and balance in the Profit
and Loss Account are without considering the impact of terms mentioned in
(vi) and (vii) (b) above, the impact of which could not be determined. Had
the effect of item mentioned in para 2 (vii) (a) above been given, the
secured loans in the balance sheet would have been Rs.1031.89 Lakhs (as
against the reported figure of Rs.407.24 lakhs), and the debit balance in
the Profit & Loss Account would have been Rs.1284.77 lakhs (as against the
reported figure of Rs 660.12 lakhs).
Subject to the foregoing, 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 Balance Sheet, of the state of affairs of the Company as
at 31st March 2005; and
b. in the case of Profit & Loss account, of the profit for the year ended
on that date.
For Anuj Kumar Gupta & Co.
Chartered Accountants
(Anuj Kumar)
Proprietor
Place : Gurgaon
Date : 23rd August, 2005
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE REPORT OF EVEN DATE OF THE
AUDITORS TO THE MEMBERS OF MS. ENCHANTE JEWELLERY LIMITED ON THE ACCOUNTS
FOR THE YEAR ENDED 31ST MARCH 2005.
1. a) As informed to us, the company is in the process of compiling the
Fixed Assets Records showing full particulars including quantitative
details and situation of fixed assets.
b) The company has a program of physical verification of fixed assets over
a period of three years which is, in our opinion, reasonable having regard
to the size of the company and the nature of the assets. However no fixed
assets have been physically verified by the management during the year.
c) In our opinion, the company has not disposed off a substantial part of
the fixed assets during the year and therefore paragraph 4 (i) (c) of the
Companies (Auditors Report) order, 2003 (here in after referred to as the
Order) is not applicable.
2. a) Physical verification of inventory has been conducted by the
management during the year and, in our opinion, the frequency of
verification is reasonable.
b) The procedures of physical verification of inventories followed by the
management are reasonable and adequate, in relation to the size of the
company and nature of its business.
c) The company is maintaining proper records of inventories and no material
discrepancies have been noticed on physical verification of inventories as
compared to the book records.
3. According to the information and explanation given to us the company has
not granted any loans, secured or unsecured, to companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956, and therefore paragraph 4(iii) of the said order is
not applicable.
4. In our opinion and according to information and explanations given to
us, there are adequate internal control procedures commensurate with the
size of the Company and the nature of the business, for the purchase of
inventories and fixed assets and for the sale of goods. We have neither
come across nor have we been informed of any major weakness in the internal
control procedures.
5. a) To the best of our knowledge and belief and according to the
information and explanations given to us, we are of the opinion that the
transactions that need to be entered in the Register in pursuance of
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanation given to
us, transactions during the year exceeding the value of five lakhs rupees
in respect of any party which required to be entered in the register u/s
301 of the Companies Act, 1956 have been made at prices which are
reasonable having regard to prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations given
to us, the company has not accepted deposit from the public to which the
provisions of section 58A and 58AA of the Companies Act, 1956 and the rules
framed there under are applicable, and therefore paragraph 4 (vi) of the
order is not applicable.
7. In our opinion, the Company has an internal audit system which is
commensurate with its size and nature of business.
8. It has been informed to us that the central Governments has not
prescribed maintenance of cost records under section 209 (1) (d) of the
Companies Act,1956 for the products of the company.
9. (a) In our opinion and according to the information and explanations
given to us, the company, due to its financial sickness, is on occasion
irregular in depositing undisputed statutory dues including provident fund,
employees state insurance, and income tax deducted at source with the
appropriate authorities. However, all of the undisputed statutory dues as
on 31.03.2005 have been paid and therefore the delay does not appear to be
willful or intentional. As on 31st March 2005, according to the records of
the company, the following are the particulars of undisputed dues on
account of provident fund, employees state insurance, sales tax and income
tax deducted at source, on which the company was irregular and the dates on
with the said payments were made.
Name of the statue:
Provident Fund
Nature of dues:
Employer contribution and PF charges for the period from September 04 to
March 05
Amount Rs.
76932/-
Due Date:
15th of the following month of the month in which amount is deducted.
Date of payment:
Rs.67129/- pertaining to the period from Sept 04 to Feb 05 has been paid
during the month of May 05 and June 05. However the company is still to pay
the employer contribution and PF charges for the month of March 05
amounting to Rs.9803/-.
Name of the statue:
Provident Fund
Nature of dues:
Employer contribution and PF charges for the period from September 04 to
March 05
Amount Rs.
10139/-
Due Date:
15th of April 05
Date of Payment:
27-04-2005
Name of the statue:
ESI Gurgaon
Nature of dues:
Employer contribution for March, 05 Rs.1675/-, and OT and trial staff for
2002-03
Amount Rs. :
4164/-
Due Date:
21st April, 2004
Date of payment:
Rs.1675/- deposited on 15/4/05 and balance on 20-6-2005
Name of the statue:
ESI Gurgaon
Nature of dues:
Payable towards Employers contribution from October 2002 to Sept 05 and
March 05, payment made for Contractors, Overtime and Staff on trial,
relating to the financial year 2002-03.
Amount Rs. :
119402/-
Due Date:
21st of following month of the month in which amount is deducted.
Date of payment:
deposited from 30.04.05
Name of the statue:
ESI Delhi
Nature of dues:
For the month of March 05
Amount Rs. :
318/-
Due Date:
21.04.2005
Date of Payment:
16.04.2004
Name of the statue:
Tax deducted at source
Nature of dues:
Deducted on 20.9.04 Rs.472/- Deducted on 31.3.2005 Rs.11698/-, Interest for
the year 2004-05 Rs.660/-
Amount Rs. :
12830/-
Due Date:
7th of following month of the month in which amount is deducted. Amount
deducted on the last day of the year can be deposited in two months from
the end of the year.
Date of Payment:
Rs.472/- deposited on 20.5.05.
Rs.8526/- deposited on 30.6.05
Rs.3566/- deposited on 24.5.05
Rs.167/- deposited on 30.6.05
(b) As on 31st March 2005, according to the records of the company, the
following are the particulars of disputed dues on account of demand of
custom duty saved under EPCG Scheme along with interest till the date of
payment of payment (Refer to note no 4 of Part B of Schedule K), that have
not been deposited.
Name of the statute:
Demand of custom duty saved along with interest on account of fulfillment
of export obligation under EPCG Licence
Nature of dues:
Custom Duty
Amount of demand net of deposits (Rs in Lakhs)
Rs. 367.66/- Lakhs
Period to which amount relates:
FY 1999-2000
Forum where dispute is pending:
In view of the company, as per the provisions of the EXIM policy 2003,
being a sick unit declared by the Board for Industrial Financial
Reconstruction, the company is entitle for an extended period till
01.03.2007 for fulfillment of export obligation. The matter is pending with
the office of the Director General of Foreign Trade.
Name of the statute:
Demand from Provident Fund departments 7Q and 14B of Employees provident
fund special provision act 1956.
Nature of dues:
PF interest and penalty on late payments from March 96 to Feb 2001
Amount of demand net of deposits (Rs in Lakhs):
Rs.920305/-
Period to which amount relates:
FY 1995-96 to 2000-01
Forum where dispute is pending:
The Company has filed an appeal with EPF Appellate Tribunal Delhi.
Name of the statue:
Ommitted wages from 1997 to 2001
Nature of dues:
ESI
Amount of demand net of deposits (Rs in Lakhs):
Rs. 115591
Period to which amount relates:
1996-97 to 2000-01
Forum where dispute is pending:
Matter is pending with ESI
10. The companys accumulated losses at the end of the financial year are
more than fifty percent of its net worth and it has incurred cash losses in
such financial year. The company has been declared a sick industrial
company during the year 1999-2000, within the meaning of clause (O) of Sub
section (1) of Section (3) of Sick Industrial companies, (Special
Provisions) Amendment Act, 1992 vide BIFR letter dated 25-.10-2002.
11 In view of the note number 6 of Part B of Schedule K, we are unable to
comment to determine whether there is a default in repayment of loans due
to the State Bank of India.
12. The company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities and
therefore paragraph 4(XII) of the order is not applicable.
13. The provisions of any special statute applicable to chit fund and
nidhi/mutual benefit fund/ society are not applicable to the company and
therefore paragraph 4(XIII) of the Order is not applicable.
14. The company is not dealing or trading in shares, securities, debentures
and other investments and therefore paragraph 4(XIV) of the Order is not
applicable.
15. According to the information and explanations given to us, during the
year the company has not given any guarantee for loans taken by others from
banks or financial institutions and therefore paragraph 4(XV) of the Order
is not applicable.
16. According to the information and explanations given to us the company
has not availed any term loans during the year and therefore paragraph
4(XVI) of the Order is not applicable.
17. According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, in our opinion,
there are no funds raised on short term basis which has been used for long
term investments and vice versa.
18. The company has not made any preferential allotment of shares during
the year and therefore paragraph 4(XVIII) of the Order is not applicable.
19. The company has not issued any debentures during the year and therefore
paragraph 4 (XIX) of the Order is not applicable.
20. The company has not raised any money by way of public issues during the
year and therefore paragraph 4 (XX) of the Order is not applicable.
21. Based upon the audit procedures performed and as per the information
and explanations given to us by the management, we report that no fraud on
or by the company has been noticed during the year.
For Anuj Kumar Gupta & Co.
Chartered Accountants
(Anuj Kumar)
Proprietor
Place : Gurgaon
Date : 23rd August, 2005