Report on the Financial Statements
We have audited the accompanying financial statements of M/s. Kajaria
Ceramics Limited (the Company), which comprise the Balance Sheet as
at March 31, 2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.
Management''s Responsibility for the Financial Statements
The Company''s 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 notified under the Companies
Act, 1956 of India (the Act), read with the General Circular 15/ 2013
dated September 13, 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.
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 and other applicable authoritative
pronouncements 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 auditors'' 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 auditors
consider 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.
In our opinion, and to the best of our information and according to the
explanations given to us, the accompanying financial statements 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: (i) in the
case of the balance sheet, of the state of affairs of the Company as at
31 March 2014;
(ii) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(iii) 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'', as
amended by ''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 Act (hereinafter referred to as the Order), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, 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 purpose of our
ii) 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
iii) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards notified under the Act read with the General
Circular 15/ 2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act, 2013; and
v) 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 March 31, 2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
1. a) The Company has maintained proper records to show full
particulars including quantitative details and situation of fixed
b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
c) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. a) Physical verification has been conducted by the management at
reasonable intervals in respect of finished goods, stores, spare parts
and raw materials. We were informed that physical verification of clay
was made on the basis of volume and density which is approximately
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 to Companies, firms or other
parties covered in the register maintained under section 301 of the
Act, except loans of Rs.307.38 million given to five Subsidiary
Companies. As per the information and explanations given to us, the
terms and conditions of the loan are not Prima facie prejudicial to the
interest of Company. There are no overdue balances outstanding in
relation to the loans as on 31.03.2014.
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, we have not observed
any continuing failure to correct major weaknesses in internal control
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
b) In our opinion, the transactions made in pursuance of contracts/
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of Rs.500,000 in respect
of each party during the year have been made at prices which appear
reasonable as per information available with the Company.
7. In our opinion and according to the information and explanations
given to us, the 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. The central government has prescribed the maintenance of cost
records under section 209(1)(d) of the Companies Act, 1956 in respect
of the manufacturing activities 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, carried
out a detailed examination of the same.
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.67.23 million in
respect of VAT, Service Tax and Entry Tax are pending in appeals with
the Commissioner Appeals/High Court as per details below:
Particulars Amount Remarks
Entry Tax 59,545,922 Appeal pending with
Rajasthan High Court
VAT 459,735 Appeal pending before
Income Tax 7,221,300 Appeal pending before
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. In our opinion, the Company is not a chit fund/ nidhi/ mutual
benefit fund/ society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the order are not applicable to the Company.
15. The Company has maintained proper records of the transactions and
contracts in respect of investment in shares and timely entries have
been made therein. All such investments are held by company in its own
16. According to information and explanations given to us, the Company
has not given any guarantee for loan taken by others from banks or
financial institutions, the terms and conditions whereof are
prejudicial to the interest of the Company.
17. 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.
18. According to the information and explanations given to us, and on
overall examination of the Balance Sheet of the Company, we are of the
opinion that the funds raised on short term basis have not been
utilized for long term investment.
19. 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.
20. Since the Company has not issued any debentures, paragraph 4 (xix)
of the order is not applicable.
21. Since the Company has not raised money by way of Public Issue
during the year paragraph 4 (xx) of the order is not applicable.
22. 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 31.03.2014.
For O. P. Bagla & Co.
Firm Regn No. 000018N
Place : New Delhi Partner
Dated : 7th May, 2014 Membership No. 91885