INDEPENDENT AUDITORS REPORT
TO,
THE MEMBERS OF
SUASHISH DIAMONDS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Suashish Diamonds Limited
("the Company") which comprise the balance sheet as at 31 March 2014, the
statement of profit and loss and cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory information.
Managements Responsibility for Financial Statements
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 referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956 ("the Act") read with the General
Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect
of Section 133 of the Companies Act, 2013. 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
disclosures in the financial statements. The procedures selected depend on the auditors
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 Companys 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
entitys internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by
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 of for our qualified audit opinion.
Basis for Qualified Opinion:
In respect of the stock of finished goods (polished diamonds), cost is based on
technical estimate by the management to avoid distortion in valuation. In view of the
nature of variation in the value of individual diamonds, the differentials in their costs,
it is not practical to compute the cost of polished diamonds using either FIFO or weighted
average cost. In view of the multiple grades, it is not practical to use specific cost.
The basis of computing cost used on consistent basis though in line with generally
accepted industry practice, is a deviation from the method prescribed by Accounting
Standard (AS)-2 Valuation of Inventories.
The impact on Profit for the year, reserves and surplus and inventories as at 31 March
2014, if any, due to the above deviations is not ascertainable.
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 the matter described in the Basis for Qualified
Opinion paragraph, the 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;
i. in the case of balance sheet, of the state of affairs of the Company as at 31 March
2014;
ii. in the case of statement of profit and loss, of the profit of the Company for the
year ended on that date; and
iii. in the case of 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 (Auditors Report) Order, 2003 (the Order) issued by
the Central Government of India in terms of sub-section (4A) of section 227 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 purpose of our audit;
b) 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;
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;
d) except for the effects of the matters described in the Basis of Qualified Opinion
paragraph, in our opinion, the balance sheet, statement of profit and loss and cash flow
statement comply with the Accounting Standards referred to in sub-section (30 of Section
211 of the Act read with the General Circular 15/2013 dated 13 September 2013 of the
Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and
e) on the basis of written representations received from the directors, as on 31 March
2014, and taken on record by the Board of Directors, none of the directors is disqualified
as on 31 March 2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
|
For Suresh Surana & Associates LLP |
|
Chartered Accountants |
|
ICAI Registration No.: 121750W / W-100010 |
|
(Nirmal Jain) |
|
Partner |
| Mumbai; Dated: |
Membership No. 34709 |
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under the heading Report on other legal and regulatory
requirements of our report of even date)
(i) (a) The Company is maintaining proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) Fixed assets have been verified by the management in accordance with a phased
programme of verification, which in our opinion, is reasonable having regard to the size
of the Company and the nature of its assets, though all the assets were not verified by
the management during the year. No material discrepancies were noticed on such
verification.
(c) During the year, the Company has not disposed off substantial part of its fixed
assets.
(ii) (a) According to information and explanations given to us, the inventory has been
physically verified by the management during the year. 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 the nature of its
business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed
on verification between the physical stocks and the book records were not material.
(iii) (a) According to information and explanations 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 Act except for interest free unsecured
loans granted to six companies during the current year. The maximum amount involved during
the year was Rs.43,986,676 and year-end balance was Rs.42,523,876.
(b) In our opinion, other terms and conditions on which loans have been granted to
companies are not, prima facie, prejudicial to the interest of the Company except that
loans are interest free.
(c) In our opinion and according to information and explanations given to us, in
respect of loans given, there is no fixed given repayment schedule.
(d) According to the information and explanations given to us, there is no overdue
amount of loan of more than rupees one lakh.
(e) According to information and explanations given to us, the Company has not taken
any loans, secured or unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act. Consequently, the requirements of Clause
(iii)(f) and (g) of the paragraph 4 of the Order are not applicable.
(iv) In our opinion and according to the information and explanations given to us,
there is adequate internal control system commensurate with the size of the Company and
the nature of its business with regard to purchase of inventory and fixed assets and for
the sale of goods and services. During the course of our audit, we have neither been
informed nor have we observed any continuing failure to correct major weaknesses in
internal control system.
(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 Act have been so entered in the register required to be maintained under that Section.
(b) In our opinion and according to the information and explanations given to us, the
transactions exceeding Rs 500,000 in respect of any party during the year in pursuance of
such contracts or arrangements entered in the register maintained under Section 301 of the
Act have been made at prices which are reasonable having regard to prevailing market
prices at the relevant time.
(vi) According to the information and explanations given to us, the Company has not
accepted any deposits from the public.
(vii) In our opinion and according to the information and explanations given to us, the
Company has an internal audit system, which needs to be strengthened to make it
commensurate with the size of the Company and the nature of its business.
(viii) According to the information and explanations given to us, the Company is
maintaining records pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Act. However we have not made
a detailed examination of records.
(ix) (a) According to the information and explanations given to us and on the basis of
our examination of the records of the
Company, the Company is regular in depositing the undisputed statutory dues including
provident fund, investor education and protection funds, employees state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other
material statutory dues as applicable with the appropriate authorities. No undisputed
amounts payable in respect of aforesaid statutory dues were outstanding as on the last day
of the financial year for a period of more than six months from the date they became
payable.
(b) According to the information and explanation given to us, there are no dues in
respect of wealth tax, customs duty, excise duty and cess, which have not been deposited
on account of any dispute. The disputed amounts that have not been deposited in respect of
income tax, sales tax and service tax are as under:
| Name of the statute |
Amount Rs. |
Period to which it relates |
Forum where dispute is pending |
| Income Tax Act, 1961 |
750,193 |
2005-06 |
CIT Appeals |
| Income Tax Act, 1961 |
1,892,667 |
2006-07 |
Appellate Tribunal |
| Income Tax Act, 1961 |
342,490 |
2007-08 |
CIT Appeals |
| Income Tax Act, 1961 |
1,447,591 |
2008-09 |
Appellate Tribunal |
| Income Tax Act, 1961 |
2,714,602 |
2009-10 |
Appellate Tribunal |
| Income Tax Act, 1961 |
2,397,390 |
2010-11 |
CIT Appeals |
| Bombay Sales Tax Act |
1,759,650 |
1993-94 |
Appellate Tribunal |
| Bombay Sales Tax Act |
432,245 |
1994-95 |
Appellate Tribunal |
| Bombay Sales Tax Act |
52,880 |
1995-96 |
Deputy Commissioner of Sales Tax Appeals IV |
| The Maharashtra Value Added Tax, 2002 |
2,830,890 |
2005-06 |
Sales Tax Officer (C-811) |
| The Maharashtra Value Added Tax, 2002 |
10,742,687 |
2008-09 |
Joint Commissioner of Sales Tax (Appeals) II |
| Central Sales Tax Act |
1,718,109 |
2005-06 |
Sales Tax Officer (C-811) |
| Central Sales Tax Act |
4,082,419 |
2008-09 |
Joint Commissioner of Sales Tax (Appeals) II |
| Finance Act - Service tax |
27,552,539 |
2006-07 to 2010-11 |
Commissioner Service Tax |
(x) The Company has no accumulated losses at the end of the financial year and it has
not incurred cash losses in the current and 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 banks. The Company has not issued any
debentures and there are no dues to financial institutions.
(xii) According to the information and explanations given to us, and in our opinion,
the Company has not granted any loans and 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. Accordingly, clause 4(xiii) of the Order is not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the
Order are not applicable to the Company.
(xv) The Company had given guarantee for loan taken by subsidiary companies from bank.
According to the information and explanations given to us, we are of the opinion that the
terms and conditions thereof were prima facie not prejudicial to the interest of the
Company. There are no such adjustments outstanding at the year end.
(xvi) The Company has not raised any term loan during the financial 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) The Company has not made any preferential allotment of shares during the year.
(xix) According to the information and explanations given to us, the Company has not
issued any debentures during the year.
(xx) According to the information and explanations given to us, the Company has not
raised any money through a public issue during the year.
(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 explanation given to us, we have neither come across any
instances of fraud on or by the Company, noticed or reported during the year, nor have we
been informed of any such cases by the management.
|
For Suresh Surana & Associates LLP |
|
Chartered Accountants |
|
ICAI Registration No.: 1 21 750W / W-100010 |
|
(Nirmal Jain) |
|
Partner |
| Mumbai; Dated: |
Membership No. 34709 |
+91-9892691696
