1. We have audited the attached Balance Sheet of DECOLIGHT CERAMICS
LIMITED, as at March 31, 2011, and also the Profit and Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. 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 disclosure in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003 and the
Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the
Central Government of India in terms of sub-section (4A) of Section 227
of the Companies Act, 1956 and on the basis of such checks and
according to the information and explanations given to us, we enclose
in the Annexure, a statement on the matters specified in paragraph 4
and 5 of the said Order.
4. 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 account as required by law have
been kept by the Company, so far as it appears from our examination of
those books;
iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet, Profit & Loss Account 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;
v. On the basis of written representations received from the directors,
as on March 31, 2011, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March,
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with and
subject to the notes thereon, 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
b) In the case of the Profit and Loss Account, of the profit 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.
Annexure To The Auditor''s Report
(Referred to in paragraph 3 of our Report of even date on the Statement
of Accounts of DECOLIGHT CERAMICS LIMITED, for the year ended on 31st
March, 2011)
i. FIXED ASSETS:
a. In our opinion, the company has 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. In our opinion, 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.
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 ad- equate in relation
its size and nature of business.
c. On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory in relation to its size and nature of busi- ness. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
iii. LOANS:
a. As explained to us, the company has not granted any loans, secured
or unsecured to compa- nies, firms or other parties covered in the
register maintained under Section 301 of the Com- panies Act, 1956,
during the year under review. Accordingly clauses 4(iii) (a), (b), (c)
and (d) are not applicable.
b. As explained to us, the company has taken unsecured from three
parties being directors of the company covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year from all such parties was Rs. 377.16
lacs, and the year end balance of loans taken from such parties is Rs.
80.67 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 de- mand 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 particu- lars of contracts or arrangements
referred to in section 301 of the Act 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 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:
To the best of our knowledge and as explained to us, the central
government has not prescribed the maintenance of cost records for the
business of the company under section 209(1)(d) of the Compa- nies Act,
1956, except for wind power generation business of the company. We have
broadly reviewed the accounts and records of the company in this
connection and are of the opinion, that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determining whether they are accurate or complete.
ix. STATUTORY DUES:
a. As per information and explanation available to us, undisputed
statutory dues including provi- dent fund, investor education and
protection fund, employee''s state insurance, income-tax, sales-tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues applicable to it, have been generally regularly
deposited with the appropriate authorities, though there had been
certain delays during the year under review. Further according to
information and explanation given to us, no such undisputed statutory
dues applicable to the company were outstanding as at 31st March, 2011
for a period of more than 6 months from the date they become payable,
except value added tax of Rs. 12.58 lacs & professional tax Rs. 0.19
lacs.
b. According to the information and explanation available to us,
details of dues of Excise Duty, Service Tax, Cess which have not been
deposited on account of any dispute with appellate authority, are given
below:
Name of Nature of dues Amount Period Forum where
the statue under to which dispute is
dispute amount pending
Rs. In relates
lacs
The Central Excise duty 4.65 2004-05 Tribunal
Excise Act including interest
1944* and penalty as
applicable
The Finance Service Tax 1.49 2007-09 Commission
Act, 1994** Penalty er(Appeals)
The excise / service tax department has issued certain show cause
notices amounting to tax liability of Rs. 511.87 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.
** However the company has received stay order for the above.
x. CASH LOSSES AND ACCUMULATED LOSSES:
The company has no accumulated losses at the end of the year under
review and it has not incurred any cash losses in the year under review
and 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 and financial
institution during the year under review. The details default at year
end after taking into the consideration restructuring / rescheduling of
the loans granted by the bank are as follows:
Period of Default Amount
(Rs. In lacs)
Less than 30 days 135.74
30 to 90 days 23.74
However as per further information and explanations received, most
overdue as of balance sheet date has been paid after balance sheet
date.
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:
In our opinion, the company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, clauses 4(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:
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 guaran- tee for loans taken by others from any bank
or financial institutions. Accordingly clauses 4(xv) is not applicable.
xvi. TERM LOANS:
In our opinion and according to the information and explanations given
to us, on an overall basis, the term loans have been applied for the
purpose for which they were 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:
According to the information and explanations given to us, during the
year under review, the com- pany 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 not issued any debentures during the year under review.
xx. PUBLIC ISSUE:
We have verified the end use of money raised during the year under
review by preferential issue of equity shares as disclosed in the notes
to the financial statements.
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 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
Firm No. - 118564W
Place : Morbi
Date :28th May, 2011
|