We have audited the accompanying financial statement of Gemstone
Investments Ltd, which comprise the Balance Sheet as at 31st March
2013, 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
The Management is responsible for the preparation of these financial
statements that give a true and fair view of financial position,
financial performance and cash flows of the company in according with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Company 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 free from material misstatement, whether
due to fraud or error.
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
Accounts 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
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 assessment, 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 the 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.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements gives the
information required by the Act in the manner so required and give a
true and fair view in conformity with the according 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 2013;
(b) in the case of the Profit and Loss, of the profit/loss for the year
ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows 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 paragraphs 4 and 5 of the
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
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
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
d. 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 (3C) of Section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on 31st March 2013, and taken on record by the Board of Directors,
none of the directors are 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 A UDITORS''REPORT
Referred to in paragraph 1 of our report of even date, on the accounts
INVESTMENTS LIMITED for the year ended 31st March 2013.
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
(c) In our opinion and according to the information and explanations
given us, no fixed asset has been disposed during the year and
therefore does not affect the going concern assumption.
2. According to information and explanations given to us the company
is Non Banking Finance Company which does not carry any inventory.
3. (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 granted loans of Rs.22 lacs (previous year 19.96 lacs) to M/s Asian
Comtrade Pvt Ltd a Company listed in the register maintained under
Section 301 of the Companies Act 1956.
(b) We have been informed that the company is holding 24.48% of the
shares of M/s Asian Comtrade Pvt. Ltd. The Loan does not carry any
interest .The Loan is granted to company for its working capital to
carry business which is in the interest of the company.
(c) The company has recovered Rs. 2 lacs and the balance amount of
Rs.20 Lacs is outstanding.
(d) There are no overdue amounts exceeding Rs.1.00 Lacs.
(e) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties listed in the Register maintained
under Section 301 of the Companies Act. Clause (f) and (g) are not
4. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fixed assets and payments
for expenses & for sale of goods. During the course of our audit, no
major instance of continuing failure to correct any weaknesses in the
internal controls has been noticed.
5. a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
particulars of contracts or arrangement referred to in section 301 of
the Act have been 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 made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regards to prevailing market prices at relevant time.
6. The Company has not accepted any deposits from the public covered
under section 58A and 58AA of the Companies Act,1956 and the Companies
(Acceptance of Deposit) rules 1975 and hence the provisions of the
clause of 4(vi) of the Companies (Auditor''s Report )Order,2003 (as
amended) are not applicable to the company.
7. As per information & explanations given by the management, the
Company has an internal audit system commensurate with its size and the
nature of its business.
8. As per information & explanation given by the management,
maintenance of cost records has been prescribed by the Central
Government under clause (d) of sub section (1) of section 209 of the
Act and we are of the opinion that prima facie the prescribed accounts
and records have been made and maintained.
9. (a) According to the records of the Company, undisputed amounts
dues including Provident Fund, Investors Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom
duty, Excise duty, and cess to the extent applicable and any other
statutory dues have generally been regularly deposited with the
appropriate authorities. According to the information and explanations
given to us there were no outstanding statutory dues as on 31st March,
2013 for a period of more than 6 months from the date they became
(b) According to information and explanations given to us , except
income tax of Rs7.96 lacs (Asst year 2012-13) no undisputed amount
payable in respect of Income Tax, Sales Tax, Wealth Tax, Custom duty,
Excise duty, and cess, were in arrears as at March 2013 for a period of
more than six months from the date they became payable.
(c) According to the information and explanations given to us, the
following amount of income tax has not been deposited on account of any
Sr. Nature of Nature of
Dues Period to
which Forum where
the Amount in
No. Statute it relates dispute is
1 Income Tax Income Tax Asst. Year CIT Appeals Rs.3,98,98,
10. The Company does not have any accumulated losses and has not
incurred cash loss during the financial year covered by our audit and
in the immediately preceding financial year.
11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to a financial
institution, bank or debentures holders.
12. According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi / mutual benefit fund /
society. Therefore, the provisions of this clause of the Companies
(Auditor''s Report) Order, 2003 (as amended) is not applicable to the
14. According to the information and explanations given to us, the
Company has maintained proper records of transaction and contracts as
to dealing or trading in shares and other investments held by the
company in its own name except to the extent, of the exemption if any,
granted under section 49 of the Companies Act, 1956 and timely entries
have been made therein.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loan taken by others from Bank
or Financial Institution.
16. Based on our audit procedures and on the information given by the
management, we report that the company has not raised any term loans
during the year.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company as at 31st
March, 2013, we report that no funds raised on short-term basis have
been used for long term investment by the Company.
18. Based on the audit procedures performed and the information and
explanations given to us by the management, we report that the company
has not made any preferential allotment of shares during the year.
19. The Company has no outstanding debentures during the period under
20. The Company has not raised any money from Public Issue during the
21. Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case by the management.
For N R GALA & ASSOCIATES
FR No: 131744W
M. No. : 040640
Date: 29th May 2013.