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Decolight Ceramics
BSE: 532858|NSE: DECOLIGHT|ISIN: INE172I01012|SECTOR: Ceramics & Granite
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« Mar 13
Auditor's Report (Decolight Ceramics) Year End : Mar '14
We have audited the accompanying financial statements of DECOLIGHT
 CERAMICS LIMITED (''the Company), which comprise the Balance Sheet as
 at March 31, 2014, 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
 
 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 13th 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.
 
 Auditor''s 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 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
 control relevant to the Company''s 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 entity''s 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 for our audit opinion.
 
 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 unutilized fund of equity preferential issue privately
 placed lying in Inter-Corporate Deposits to the tune of Rs. 27.57/- crore
 is pending for renewal / receipt from the respective parties. Refer
 Note 28(10)
 
 a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2014;
 
 b) In the case of the Statement of Profit and Loss, of the loss of the
 Company for the year ended on that date; and
 
 c) In the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 Emphasis of Matter
 
 We draw attention to Notes 28 (11 to 15) with respect to the fact that
 the company has prepared its financial statements by applying the going
 concern assumption, notwithstanding of the facts as mentioned in such
 notes.
 
 Our report is not qualified in this regard.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by the Companies (Auditor''s 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 paragraph 4 and 5 of the said
 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 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 Balance Sheet, Statement of Profit & Loss and
 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, read with the General Circular 15/2013 dated
 13th 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 March 31, 2014, and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2013 from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 Section 274 of the Companies Act, 1956;
 
 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, 2014)
 
 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. No material discrepancies with respect to book
 records were noticed on such verification.
 
 c.  As per information & explanation produced for our verification, the
 company has not disposed of substantial part of fixed assets during the
 year and the going concern status of the company is not affected.
 However, in our opinion there is substantial uncertainty about the
 going concern status of the company looking to the matters referred in
 Note 28 (10 to 15).
 
 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. As
 explained to us, there were no material discrepancies noticed on
 physical verification of inventory as compared to the book records.
 
 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 301 of
 the Companies Act, 1956, during the year under review. Consequently,
 the provisions of clauses (iii) (b), (c) and (d) of the order are not
 applicable to the company.
 
 b.  According to the information and explanations given to us and on
 the basis of our examination of the books of account, the company has
 taken unsecured loans aggregating to Rs. 118.20 lacs from three directors
 of the company, being parties covered in the register maintained under
 section 301 of the Companies Act, 1956. The total maximum amount
 involved during the year from all three parties together was Rs. 350.92
 lacs and the total year end balance of loans taken from three directors
 was Rs. 334.17 lacs.
 
 c.  According to information and explanation given to us and in our
 opinion the rate of interest and other terms and conditions, wherever
 stipulated were not prima facie prejudicial to the interest of the
 company.
 
 d.  According to the information and explanations given to us said
 loans were repayable on demand and the repayment was within dates
 demanded.
 
 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 for the purchase of
 inventory, fixed assets and for the 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.  TRANSACTIONS IN PURSUANCE OF SECTION 301:
 
 a. According to 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, if any that need to be entered into the
 register maintained under Section 301 have been so entered.
 
 b. In our opinion and according to the information and explanations
 given to us, transactions made in pursuance of such contracts or
 arrangements, if any, have been made at prices which are reasonable
 having regard to the prevailing market prices available at the relevant
 time.
 
 vi.  DEPOSITS:
 
 As explained to us, the company has not accepted any deposits from the
 public within meaning of Section 58A and 58AA of the Companies Act,
 1956, during the year under review.
 
 vii. INTERNAL AUDIT:
 
 In our opinion and according to information and explanations given to
 us, no internal audit carried out during the year under review, looking
 to the small volume of business operations carried out by the company
 during the year and critical financial position of the company.
 
 viii. COST RECORDS:
 
 We have broadly reviewed the cost records maintained by the Company
 pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the central government under section 209(1)(d) of the
 Companies Act, 1956 and are of the opinion, that prima facie, the
 prescribed cost records have been made and maintained. However, we have
 not made a detailed examination of the records with a view to
 determining whether they are accurate or complete.
 
 ix.  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, investor education and protection fund,
 employee''s state insurance, income-tax, sales-tax, wealth tax, service
 tax, custom duty, excise duty, 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, 2014 for a
 period of more than 6 months from the date they become payable are
 Value Added Tax & Central Sales Tax of Rs. 166.58 lacs, TDS of Rs. 0.43
 lacs, Provident Fund Rs. 1.54 lacs, Service Tax Rs. 0.21 lacs and
 Professional tax of Rs. 2.32 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. Name of       Nature of dues             Amount
 No. the Statue                               under dispute
                                              rs in Lacs
 
 1.  The Central   Excise duty including         4.65 
     Excise Act    interest and penalty 
     1944 *        as applicable
 
 2.  The GVAT      Central Sales Tax             146.90 
     Act, 2003
 
 
 Name of the Statute          Period to       Forum where
                              which           dispute is pending
                              amount relates
 
 The Central Excise Act 1944 *2004-05         Tribunal
 
 The GVAT Act, 2003           2009-10         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.
 
 x.  CASH LOSSES AND ACCUMULATED LOSSES:
 
 The company has accumulated losses of Rs. 3222.67 lacs at the end of the
 year under review. The company has incurred cash loss in the year under
 review to the tune of Rs. 3045.16 lacs and it has incurred cash loss of Rs.
 1120.07 lacs in the immediately preceding financial year.
 
 xi.  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 (? In lacs)
 
 Less than 30 days                                 0.18
 
 30 to 90 days                                     0.18
 
 More than 90 days (Excluding uncharged
 interest of ? 202.57 lacs)                     3344.86
 
 xii.  LOANS & ADVANCES ON PLEDGE OF SHARES DEBENTURES & OTHER
 SECURITIES:
 
 In our opinion and according to information and explanation given to
 us, no loans and advances have been granted by the company on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 xiii. CHIT FUND/ NIDHI / MUTUAL BENEFIT FUND / SOCIETY:
 
 The company is not a chit fund or a nidhi / mutual benefit fund /
 society. Therefore, clause xiii of the Companies (Auditor''s Report)
 Order, 2003 (as amended) is not applicable to the company.
 
 xiv. TRADING IN SHARES, SECURITIES, DEBENTURES & OTHER INVESTMENTS:
 
 According to information and explanations given to us, the company is
 not dealing or trading in shares, securities, debentures and other
 investments.
 
 xv. 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.
 
 xvi.TERM LOANS:
 
 Based on our audit procedures and according to information and
 explanations given to us, the company has obtained vehicle loan during
 the year under review and same has be applied for the purpose it was
 obtained.
 
 xvii. SHORT TERM FUNDS USED FOR LONG TERM INVESTMENTS:
 
 According to the information and explanations given to us, and on
 overall examination of the year end balance sheet of the company, we
 are of the opinion that prima facie, no funds raised on short-term
 basis have been used for long-term investments.
 
 xviii. PREFERENTIAL ALLOTMENT OF SHARES:
 
 Based on the audit procedures performed and according to the
 information and explanations given to us, during the year under review,
 the company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under Section
 301 of the Companies Act, 1956.
 
 xix. DEBENTURES:
 
 The company has no outstanding debenture during the year under review.
 
 xx. PUBLIC ISSUE:
 
 The company has not raised any money through a public issue during the
 year under review.
 
 xxi. FRAUD:
 
 Based upon the audit procedures performed for the purpose of reporting
 the true and fair view of the financial statements and as per the
 information and explanation given to us by the management, we report
 that no significant fraud on or by the company has been noticed or
 reported during the course of our audit.
 
 For SVK & ASSOCIATES
 Chartered Accountants 
 Firm No. – 118564W
 Shilpang V. Karia
 Partner                                     Place: Morbi
 M. No. – 102114                             Date: 30th May, 2014
 
 
 
 
Source : Dion Global Solutions Limited
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