We have audited the attached Balance Sheet of KAJARIA CERAMICS LIMITED
as at 31 st March, 2009 and also the Profit & Loss Account and the Cash
Flow statement for the Year Ended on that date. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We have 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 disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
1. As required by the Companies (Auditors Report) order, 2003 as
amended by the Companies (Auditors Report) (Amendment) order 2004
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the annexure a statement on the
matters specified in the paragraphs 4 & 5 of the said order to the
extent applicable to the Company.
2. Further to our comments in the annexure referred to above, we
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 such
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the balance sheet, profit and loss account and Cash
Flow statement dealt with by this report comply with the applicable
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, 2009 and taken on record by the Board
of Directors, we report that none of the directors of the Company is
disqualified from being appointed as Director as at 31st March, 2009 in
terms of section 274(1) (g) of the Companies Act, 1956.
f) i) The Company is accounting for Profit / loss from
foreign exchange derivative transactions on actual receipt/ payment
basis. The liability for the same, if any, on mark to market basis
asat the year end could not be ascertained.
ii) Attention is invited to Note Number 19 in Schedule 23 regarding
recognizing Export benefits on unutilized advance licences under DERC
scheme to the extent of duty leviable on imports to be made in future
which has resulted into increase of net profit by Rs. 53.38 Million.
g) Subject to our comments in para f (i) above, relating to profits/
losses on foreign exchange derivative transactions, in our opinion and
to the best of our information and according to the explanations given
to us, the said accounts read together with Significant Accounting
Policies and other Notes thereon in Schedule - 23, give the information
required by the Companies Act, 1956 in the manner so required and give
true and fair view in conformity with the accounting principles
generally accepted in India :
i) In the case of the Balance Sheet of the state of affairs of the
Company as at 31.3.2009.
ii) In the case of the Profit & Loss Account of the PROFIT of the
Company for the year ended on that date.
iii) In case of cash flow statement of the cash flow of the Company for
the year ended on that date.
Annexure to the Auditors Report
Annexure referred to in paragraph 1 of the Auditors Report on Accounts
for the year ended 31st March 2009
1. a) The Company has maintained proper records to show
full particulars including quantitative details and situation of fixed
b) As explained to us, major fixed assets have been physically verified
by the management during the year. We have been informed that the
discrepancies noticed on such verification as compared to book record
were not material and have been properly dealt with in the books of
account. In our opinion the frequency of verification is reasonable.
c) As the Company has not disposed off a substantial part of fixed
assets during the year, paragraph 4 (i) (c) of the said order is not
2. a) Physical verification has been conducted by the
management at reasonable intervals in respect of finished goods,
stores, spare parts and raw materials except day. We were informed that
physical verification of clay was difficult due to its volume and loose
b) In our opinion and according to the information and explanation
given to us, the procedure of physical verification of these stocks
followed by the management is reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion the Company is maintaining proper records of
inventories. The discrepancies noticed on such verification between the
physical stocks and book records were not significant and the same has
been properly dealt with in the books of account.
3. The Company has not granted any loan during the year to companies,
firms or other parties covered in the register maintained under section
301 of the Act.
4. The Company has not taken any loan from companies, firms or other
parties covered in the register maintained under section 301 of the
5. 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 the nature of its business with regard
to purchase of inventories, fixed assets and with regard to the sale of
goods and services. During the course of audit, no major weakness has
been noticed in the internal control system.
6. a) In our opinion and according to information and
explanations given to us the transactions that needed to be entered in
the register maintained under section 301 of the Act have been entered
in the register.
b) As per information and explanations given to us aforesaid
transactions have been made at prices which are reasonable having
regard to the prevailing market price at the relevant time.
7. In our opinion and according to the information and explanations
given to us, me Company has not accepted any deposits within the
meaning of provisions of section 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.
8. In our opinion and according to the information and explanations
given to us, the Company has adequate internal audit system
commensurate with its size and nature of its business.
9. We are informed that the Central Government has not prescribed the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956 for the products of the Company.
10. a) As per information and explanations given to us the
Company has been regular in depositing the undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess, Octroi, entry tax and other
statutory dues with the appropriate Authorities. There are no
undisputed statutory dues at the year end outstanding for a period of
more than six months from the date they become payable.
b) We have been informed that disputed demands of Rs. 2.25 million in
respect of Sales Tax and Service Tax are pending in appeals with the
Commissioner Appeals/High Court.
11. There are no accumulated losses of the Company as at the end of the
year, the Company has not incurred cash losses during the financial
year covered by our audit and in the immediately preceding financial
12. Based on our audit procedures and on the basis of information and
explanations given to us by the management, we are of the opinion that
there is no default in repayment of dues to the Financial Institutions,
banks or debenture holders as at the year end.
13. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Hence paragraph 4 (xii) of the order is not applicable.
14. According to information and explanations given to us the Company
has given guarantee for loans taken by associates amounting to Rs.50
Million and by others amounting to Rs. 50 Million from bank and in our
opinion the terms and conditions whereof are not prejudicial to the
interest of the Company.
1 5. According to the information and explanations given to us the term
loans taken by the Company have been applied for the purposes for which
the loans were obtained.
16. According to the information and explanations given to us the funds
raised on short term basis have not been utilized for long term
17. During the year the Company has not made any preferential allotment
of shares to parties and Companies covered in the Register maintained
u/s 301 of the Companies Act 1956. As such paragraph 4 (xviii) of the
order is not applicable.
18. According to the information & explanation given to us the Company
has already created securities of charge in respect of debentures
19. Since the Company has not raised money by way of Public Issue
during the year paragraph 4 (xx) of the order is not applicable.
20. Based upon the audit procedures performed and information and
explanations given by the management, we report that, no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended 31.03.2009.
21. Other clauses of the order are not applicable to the Company for
the year under report.
For O. P. Bagla & Co.
Place: New Delhi Partner
Dated : 5th May 2009 Membership No. 91885