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Decolight Ceramics
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« Mar 12
Auditor's Report (Decolight Ceramics) Year End : Mar '13
Report on Financial Statements
 
 We have audited the accompanying financial statements of DECOLIGHT
 CERAMICS LIMITED (''the Company), which comprise the Balance Sheet as
 at March 31, 2013, 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). 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. 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. 28.32/- crore is pending for renewal /
 receipt from the respective parties.  Refer Note 28(11)
 
 a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2013;
 
 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.
 
 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, to the extent applicable;
 
 e) on the basis of written representations received from the directors,
 as on March 31, 2013, 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;
 
 f) Since the Central Government has not issued any notification as to
 the rate at which the cess is to be paid under section 441A of the
 Companies Act, 1956 nor has it issued any Rules under the said section,
 prescribing the manner in which such cess is to be paid, no cess is due
 and payable by the Company.
 
 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, 2013)
 
 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 explained to us, the company has sold substantial part of fixed
 assets of Aluminium Composite Panels manufacturing division. However in
 our opinion, going concern status of the company as a whole is not
 affected since fixed assets and business of Aluminium Composite Panels
 manufacturing division was not substantial considering the total fixed
 assets and business of the company as a whole.
 
 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. 418.52 lacs from three directors
 of the company and Rs. 178.50 lacs from one corporate, 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
 four parties together was Rs. 504.92 lacs and the total year end balance
 of loans taken from three directors is Rs. 258.96 lacs and from corporate
 is NIL.
 
 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, the internal audit system of the company is commensurate with size
 and nature of its business.
 
 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 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, 2013 for a period of more
 than 6 months from the date they become payable are Value Added Tax &
 Central Sales Tax of Rs. 89.61 lacs, TDS of Rs. 0.01 lacs, Service Tax Rs.
 5.27 lacs and Professional tax ofRs. 2.01 lacs.
 
 b.  According to the information and explanation available to us,
 details of dues of Excise Duty 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     Period to   Forum where
 No. the Statue                      under 
                                     dispute    which       dispute is 
                                                            pending
                                     Rs. in 
                                     Lacs       amount
                                                relates
 
 1.  The Central  Excise duty 
                  including          4.65       2004-05     Tribunal
     Excise Act   interest and 
                  penalty 
     1944 *       as applicable
 
 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 no accumulated losses at the end of the year under
 review, however it has incurred cash loss in the year under review to
 the tune of Rs. 1120.07 lacs and it has incurred cash loss of Rs.  983.60
 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 details of default at year end are as follows:
 
 Period of Default Amount (Rs. In lacs)
 
 Less than 30 days 67.98
 
 30 to 90 days 43.99
 
 However as per further information and explanations received, out of
 the total overdue as stated above of Rs. 111.97 lacs as on the balance
 sheet date, Rs. 78.62 lacs has been paid after balance sheet date., till
 the date of signing this report.
 
 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 not obtained any new term
 loan during the year under review.
 
 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
 
 Shilpang V.  Karia
 
 Partner
 
 M.  No. - 102114 
 
 Place: Morbi
 
 Firm No. - 118564W 
 
 Date: 25th May, 2013
Source : Dion Global Solutions Limited
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