Home  »  Company  »  Celebrity Fashions L  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Celebrity Fashions Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Celebrity Fashions Limited ("the Company"), which comprise the Balance sheet as at March 31, 2015, the Statement of Profit and Loss, 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 Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 judgement, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s directors, as well as evaluating the overall presentation of financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the Company as at March 31, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 27 of the Financial Statements which indicates that the Company has accumulated losses and that more than 50% of its Net Worth has been eroded. We have evaluated the appropriateness of the 'going concern’ concept in accordance with SA-570, based on such evaluation, in our opinion and on the basis of the information and explanations given to us, we report that we have obtained sufficient evidence to establish the continuance of the Company as a going concern. The financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Companies Act, 2013, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. on the basis of the written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act; and

f. with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 29 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

iii. There has been a delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company which is detailed below :

Rs. 33,799 outstanding since November 13, 2013.

annexure to the auditors’ report

The Annexure referred to in our Independent Auditor’s Report to the members of Celebrity Fashions Limited ("the Company") for the year ended March 31, 2015. We report that:

1. In respect of its Fixed Assets:

a. 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 Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased periodical manner designed to cover all the items over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no discrepancies were noticed on such verification. In our opinion this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets.

2. In respect of its inventories :

a. As explained to us the inventories of the Company, except in the case of raw material of the value Rs. 0.99 crores lying in transit for which confirmation has been obtained, have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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 to the size of the Company and the nature of its business.

c. According to the information and explanations given to us, the Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to book records.

3. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 189 of the Companies Act, 2013. Hence the question of reporting whether the receipt of principal and interest are regular and whether reasonable steps for recovery of over dues of such loans taken do not arise.

4. 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 the purchase of fixed assets, inventory and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither observed nor have we been informed of any continuing failure to correct major weaknesses in the internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore in our opinion the provisions of Clause (v) of paragraph 3 of the Order (as amended) are not applicable to the Company.

6. To the best of our knowledge and as explained to us, the Central Government of India has not prescribed the maintenance of cost records under Section 148(1) (d) of the Companies Act, 2013 for any of the products manufactured by the Company.

7. In respect of statutory dues:

a. According to the information and explanations given to us, and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues, including provident fund, employees state insurance scheme, income tax, duty of customs, value added tax, cess and other material statutory dues as applicable, have been regularly deposited during the year by the Company with the appropriate authorities. However there has been delay in depositing service tax dues with the appropriate authorities during the year. As explained to us, the Company did not have any dues on account of duty of excise.

According to the information and explanations given to us, except for service tax payable amounting to Rs. 23.04 lakhs no undisputed amounts payable in respect of provident fund, employees state insurance scheme, income tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us, the disputed statutory dues aggregating to Rs. 29.03 lakhs that has not been deposited on account of matters pending before the appropriate authorities are as under:-

Name of the Nature of Period to Forum Where the dispute Statue Dues which the is pending amount relates

Income Tax Income 2003-2004 Pending before the Act,1961 Tax Assessing Officer

Income Tax Income 2004-2005 Pending before the Act,1961 Tax Assessing Officer

Income Tax Fringe 2007-2008 Pending for rectification Act,1961 Benefit before the Assessing Tax Officer

Income Tax Fringe 2008-2009 Pending for rectification Act,1961 Benefit before the Assessing Tax Officer

Income Tax Income 2011-2012 Pending for rectification Act,1961 Tax before the Assessing Officer and appeal before the Commissioner of Income Tax Appeals, Chennai

Name of the Amount Statue (in Rs.)



Income Tax 5,26,669* Act,1961

Income Tax 9,61,087* Act,1961

Income Tax 6,99,860 Act,1961

Income Tax 6,01,600 Act,1961

Income Tax 1,14,652 Act,1961

Total 29,03,868

* Relating to Income Tax dues of partnership firm Celebrity Connections

c. According to the information and explanations given to us, the following are the instances of delay in transferring amounts required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under .

Rs. 33,799 outstanding since November 13, 2013.

8. The accumulated losses of the Company have exceeded 50% of its net worth as at March 31, 2015. The Company has not incurred cash losses during the current financial year and in the immediately preceding financial year. Further during the year the Board for Industrial and Financial Reconstruction (BIFR) has discharged the Company from the purview of the Sick Industrial Companies Act under section 3(1)(o), vide its order dated 04th August 2014.

9. Based on our audit procedures and according to the information and explanations given to us, the Company has defaulted in repayment of Rs.18.22 crores ( principal amount) and interest amounting to Rs. 1.09 crores in respect of loans availed from State Bank of India. While repayment of principal is pending since March 31, 2015 interest remained unpaid since February 2015, which has however since been regularised.

10. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Hence in our opinion clause (x) of paragraph 3 of the Companies (Auditors Report) Order, 2015 is not applicable to the Company.

11. According to the information and explanations given to us and based on the records and documents produced before us, in our opinion the term loans have been applied for the purposes for which they were obtained.

12. According to the information and explanations given to us no material fraud on or by the Company has been noticed or reported during the course of our audit.

Place : Chennai For CNGSN & ASSOCIATES LLP Date : May 21, 2015 Chartered Accountants Firm Registration Number 004915S C.N. GANGADARAN Partner Membership Number 11205




Mar 31, 2014

We have audited the accompanying financial statements of Celebrity Fashions Limited ("the Company"), which comprise the balance sheet as at March 31, 2014, 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 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section133 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.

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 judgement, including the assessment of the risks of material misstatements 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, 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 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 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 March 31, 2014;

(b) in the case of the statement of profit and loss, of the profit 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.

Emphasis of Matter

We draw attention to Note No. 26 of Financial Statements which details the erosion of more than 50% of the net worth of the Company due to accumulated losses. We have evaluated the appropriateness of the ''going concern'' concept in accordance with SA-570, based on such evaluation, in our opinion and on the basis of the information and explanations given to us, we report that we have obtained sufficient evidence to establish the continuance of the Company as a going concern. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act,1956 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 Companies Act, 1956 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 audit;

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 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;

d. in our opinion, the balance sheet, statement of profit and loss and cash flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of Ministry of Corporate Affairs in respect of Section133 of the Companies Act, 2013. ; and

e. 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 Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in our report to the members of Celebrity Fashions Limited ("the Company") for the year ended March 31, 2014. We report that:

1. In respect of its Fixed Assets:

a. 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 of the Company have been physically verified by the Management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. In accordance with the phased programme of verification, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.

c. The fixed assets disposed of during the year do not constitute a substantial part of the fixed assets of the Company and such disposal, in our opinion has not affected the going concern status of the Company.

2. In respect of its inventories :

a. The inventories have been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 :

a. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

b. The Company has taken an unsecured loan from a party covered in the register maintained under section 301 of the Companies Act, 1956, The maximum amount outstanding during year was Rs. 2.65 crores and the yearend balance of such loan outstanding was Rs. Nil.

c. In our opinion and according to the information and explanations given to us the loan taken was non-interest bearing, unsecured and the other terms and conditions are not prima facie prejudicial to the interest of the Company.

d. The loan availed by the Company was repayable on demand and are non interest bearing. As at the year end the said loan has been fully repaid by the Company and hence in our opinion no comments are called for.

4. 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 for the purchase of fixed assets, inventory and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

5. In respect of contracts or arrangements referred to in section 301 of Companies Act, 1956

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

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 Rs. 5 lakh in respect of each party during the year have been made at prices which appear reasonable having regard to the prevailing market prices at the relevant time, as per information available with the Company.

6. According to the information and explanations given to us the Company has not accepted any deposits from the public. Therefore the provisions of Clause (vi) of paragraph 4 of the Order (as amended) are not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. 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 maintained. We have however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. According to the information and explanations given to us, and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance Scheme, Income Tax, Service Tax, Customs Duty and other material statutory dues as applicable, have during the year been regularly deposited by the Company with the appropriate authorities.

b. According to the information and explanations given to us, except for Service Tax payable amounting to Rs. 436,233/- no undisputed amounts payable in respect of Provident Fund, Employees State Insurance Scheme, Income Tax, Excise Duty, Customs Duty and other material statutory dues were in arrears as at March 31, 2014 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 disputed statutory dues aggregating to Rs. 29.03 lakhs that has not been deposited on account of matters pending before the appropriate authorities are as under:-

Name of the Statue Nature of Dues Period to which the amount relates

Income Tax Act,1961 Income Tax Demand 2003-2004

Income Tax Act,1961 Income Tax Demand 2004-2005



Income Tax Act,1961 Fringe Benefit Tax 2007-2008 Demand



Income Tax Act,1961 Fringe Benefit Tax 2008-2009 Demand

Income Tax Act,1961 Income Tax Demand 2011-2012



Name of the Statue Forum Where the Amount dispute is pending (in Rs. .)

Income Tax Act,1961 Pending before the 5,26,669* Assessing Officer

Income Tax Act,1961 Pending before the 9,61,087* Assessing Officer

Income Tax Act,1961 Pending for rectification 6,99,860 before the Assessing Officer

Income Tax Act,1961 Pending for rectification 6,01,600 before the Assessing Officer

Income Tax Act,1961 Pending for rectification before the Assessing Offcer and appeal before the 1,14,652 Commissioner of Income Tax Appeals, Chennai

Total 29,03,868

* Relating to Income Tax dues of partnership firm Celebrity Connections

10. The accumulated losses of the Company are in excess of 50% of the net worth of the Company as at the end of the financial year covered by our audit. The Company has not incurred cash losses during the current financial year and in the immediately preceding financial year. The Board for Industrial and Financial Reconstruction (BIFR) has declared the Company as a sick industrial company under section 3(1)(o) of Sick Industrial Companies Act, vide its order dated 19th April 2011.

11. Based on our audit procedures and according to the information and explanations given to us, the Company has delayed beyond the stipulated dates the repayment of dues and payment of interest in respect of term loans availed from HDFC Bank Ltd., amounting to Rs. 2.51 crores and Rs. 2.57 crores respectively. While repayment of principal is pending since February 2012, interest remained unpaid since February 2011. During the year the said delays have been regularised and as at March 31, 2014 there were no dues to HDFC Bank Ltd. (Refer Note 4 and Note 26 to the Notes on Accounts)

The Company has also delayed beyond the stipulated dates the payment of interest on term loans and working capital loans availed from State Bank of India since August 2012. During the year under review the payment of interest to State Bank of India was regularised and as at year end there were no overdue amounts. Necessary approvals for rescheduling/restructuring of repayments have been obtained from State Bank of India.

12. According to the information and explanations given to us, and based on the records and documents produced before us, The Company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other securities.

13. In our opinion and to the best of our information and according to the explanations provided by the management, the Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 (as amended) do not apply to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on a short term basis have not been used for long term investments.

18. The Company has during the year made preferential allotment of shares to parties, covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion and according to the information and explanations given to us, the price at which shares have been issued is not prejudicial to the interest of the Company.

19. The Company did not have any outstanding debentures during the period.

20. The Company has not raised any money by way of public issue during the period. Hence in our opinion Clause 4(xx) of the Companies (Auditors Report) Order 2003 (as amended) is not applicable to the Company.

21. 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 explanations given to us by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

for ANIL NAIR & ASSOCIATES for CNGSN & ASSOCIATES Chartered Accountants Chartered Accountants Firm Registration Number 000175S Firm Registration Number 004915S

G. ANIL C.N. GANGADARAN Partner Partner Membership Number 22450 Membership Number 11205

Dated : 5th May 2014 Place : Chennai


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Celebrity Fashions Limited ("the Company"), which comprise the Balance sheet as at 31st March 2013, the Statement of Proft and Loss and the Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial 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 fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatements of the fnancial 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 fnancial 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 fnancial statements.

We believe that the audit evidence we have obtained is suffcient 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 fnancial 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Proft and Loss, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 26 of Financial Statements which details the Erosion of Net Worth of the Company due to losses incurred by the Company during the year under review and the accumulated losses. We have evaluated the appropriateness of the ''going concern'' concept in accordance with SA-570. Based on such evaluation, in our opinion and on the basis of the information and explanations given to us, we report that we have obtained suffcient evidence to establish the continuance of the Company as a going concern. Our opinion is not qualifed in respect of this matter.

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 specifed in paragraphs 4 and 5 of the 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 purpose of our audit;

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 books;

c. the Balance Sheet, Statement of Proft and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Proft and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

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 disqualifed as on March 31, 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 notifcation 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 Auditors'' Report

The Annexure referred to in our report to the members of Celebrity Fashions Limited ("the Company") for the year ended March 31, 2013. We report that: 1. In respect of its Fixed Assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fxed assets on the basis of available information.

b. As explained to us, the fxed assets of the Company have been physically verifed by the Management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. In accordance with the phased programme of verifcation, certain fxed assets were verifed during the year and no material discrepancies were noticed on such verifcation. c. The fxed assets disposed of during the year do not constitute a substantial part of the fxed assets of the Company and such disposal, in our opinion has not affected the going concern status of the Company.

2. In respect of its inventories :

a. The inventories have been physically verifed during the year by the management. In our opinion the frequency of verifcation is reasonable.

b. In our opinion and according to the information and explanations given to us, the physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verifcation of inventories as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, frms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 :

a. The Company has not granted any loans, secured or unsecured, to companies, frms or other parties listed in the Register maintained under Section 301 of the Act.

b. The Company has not taken any loans, secured or unsecured, from companies, frms or other parties listed in the Register maintained under Section 301 of the Act.

4. 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 for the purchase of fxed assets, inventory and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5.In respect of contracts or arrangements referred to in section 301 of Companies Act, 1956

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

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 Rs. 5 lakh in respect of each party during the year have been made at prices which appear reasonable having regard to the prevailing market prices at the relevant time, as per information available with the Company.

6. According to the information and explanations given to us the Company has not accepted any deposits from the public. Therefore the provisions of Clause (vi) of paragraph 4 of the Order (as amended) are not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. 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 maintained. We have however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. According to the information and explanations given to us, and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance Scheme, Income Tax, Excise Duty, Service Tax, Customs Duty and other material statutory dues, as applicable have been regularly deposited during the year by the Company with the appropriate authorities.

b. According to the information and explanations given to us, except for service tax payable amounting to Rs. 6,15,528/-, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance Scheme, Excise Duty, Customs Duty and other material statutory dues were in arrears as at March 31, 2013 for a period of more than six months from the date they became payable.

* Relating to Income Tax dues of partnership frm Celebrity Connections

10. The accumulated losses of the Company are in excess of 50% of the net worth of the Company as per the Balance Sheet as at the end of the fnancial year covered by our audit. The company has not incurred cash losses during the current fnancial year however the Company had incurred cash losses during the immediately preceding fnancial year. The accumulated losses have totally eroded the net worth and the Company has been declared a Sick Industrial Company in accordance with the provisions of the Sick Industrial Companies Act, by the Board for Industrial and Financial Reconstruction.

11. According to the information and explanations given to us during the year under review the Company has defaulted in repayment of Rs. 2.51 crores being the principal amount and interest amounting to Rs. 2.57 crores for term loans availed from HDFC Bank Limited. The term loan repayment is pending from February 2012, while interest remains unpaid since February 2011. The Company has also defaulted in payment of interest amounting to Rs. 4.01 crores in respect of working capital loans and term loans from the State Bank of India since August 2012 (Refer Note No. 4 of the Notes of Accounts)

12. According to the information and explanations given to us, and based on the records and documents produced before us, The Company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other securities.

13. In our opinion and to the best of our information and according to the explanations provided by the management, the Company is not a Chit Fund or a Nidhi / Mutual Beneft Fund / Society. Therefore the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 (as amended) do not apply to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or fnancial institutions.

16. According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on a short term basis have not been used for long term investments.

18. The Company has during the year made preferential allotment of shares to parties, covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion and according to the information and explanations given to us, the price at which shares have been issued is not prejudicial to the interest of the Company.

19. The Company did not have any outstanding debentures during the period.

20. The Company has not raised any money by way of public issue during the period. Hence in our opinion Clause 4(xx) of the Companies (Auditors Report) Order 2003 (as amended) is not applicable to the Company.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the fnancial statements, and as per the information and explanations given to us by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

for ANIL NAIR & ASSOCIATES for CNGSN & ASSOCIATES

Chartered Accountants Chartered Accountants

Registration Number: 000175S Registration Number:004915S

G. ANIL C.N. GANGADARAN

Partner Partner

Membership Number:22450 Membership Number:11205

Chennai, 3rd May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/S CELEBRITY FASHIONS LIMITED as at March 31, 2012, the Statement of Profit and Loss 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 disclosures 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 preparation. We believe that our audit provides a reasonable basis for our opinion.

3. 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 Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

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.

d. In our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. Considering the losses incurred by the Company during the year under review and the accumulated losses of the Company as at the year end, we have evaluated the appropriateness of the "going concern" assumption in accordance with SA - 570. Based on such evaluation, in our opinion and on the basis of the information and explanations given to us, we report that we have obtained sufficient audit evidence to establish continuance of the Company as a going concern. The mitigating factors have been outlined in Note No 27 of the Notes on Accounts.

f. On the basis of written representations received from the Directors as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors is prima facie disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

g. In our opinion and to the best of our information and according to the explanations given to us, they said accounts read together with the Significant Accounting Policies and 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012:

ii) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date ; and

iii) 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

1. In respect of its Fixed Assets:

a. 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 of the Company have been physically verified by the Management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. In accordance with the phased programme of verification, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.

c. The fixed assets disposed of during the year do not constitute a substantial part of the fixed assets of the Company and such disposal in our opinion has not affected the going concern status of the Company.

2. In respect of its inventories :

a. The inventories have been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 :

a. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under Section 301 of the Act.

b. 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 Act.

4. 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 for the purchase of fixed assets, inventory and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. In respect of contracts or arrangements referred to in section 301 of Companies Act, 1956

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

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 Rs.500, 000/- in respect of each party during the year have been made at prices which appear reasonable having regard to the prevailing market prices at the relevant time, as per information available with the Company.

6. According to the information and explanations given to us the Company has not accepted any deposits from the public. Therefore the provisions of Clause (vi) of paragraph 4 of the Order (as amended) are not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. 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 maintained. We have however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. According to the information and explanations given to us, and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance Scheme, Income Tax, Excise Duty, Service Tax, Customs Duty and other material statutory dues, as applicable have been regularly deposited during the year by the Company with the appropriate authorities.

Further since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

b. According to the information and explanations given to us, except for income tax amounting to Rs.41,50,227/- relating to assessment year 2004-05, no undisputed amounts payable in respect of the aforesaid dues were in arrears as at 31st March 2012 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 disputed statutory dues aggregating to Rs.47.34 Lacs that has not been deposited on account of matters pending before the appropriate authority are as under:-

Name of the Nature of Period to which Forum where Amount Statute Dues the amount relate ispute is (In Lacs) pending

Income Tax Act, Income Tax AY 2003-04 Pending for 5.26 1961 Demand re-assessment before the Assessing Officer

Income Tax Act, Fringe AY 2007 - 08 Pending for 6.99 1961 Benefit Tax rectification Demand. before the Assessing Officer

Service Tax Service Tax April 2009 to Pending 35.09 * Demand September 2011 Before Supreme Court

*As per the directions of the Supreme Court the Company has remitted

a sum of Rs.17.55 Lacs against this demand.

10. The accumulated losses of the Company are in excess of 50% of the net worth of the Company as per the Balance Sheet as at the end of the financial year covered by our audit. The company has incurred a cash loss in the current financial year, and also in the immediately preceding financial year. The accumulated losses have totally eroded the net worth and the Company has been declared a Sick Industrial Company in accordance with the provisions of the Sick Industrial Companies Act, by the Board for Industrial and Financial Reconstruction.

11. According to the information and explanations given to us during the year under review, the Company has defaulted in repayment of term loans and interest thereon to HDFC Bank Ltd. Repayment of term loan , amounting to ' 0.22 crore, is pending since February 2012 while interest on term loans amounting to ' 1.55 crores, remains unpaid since January 2011.

12. According to the information and explanations given to us, and based on the records and documents produced before us, The Company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other securities.

13. In our opinion and to the best of our information and according to the explanations provided by the management, the Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. There- for the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 (as amended) do not apply to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, deben- tures and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on a short term basis have not been used for long term investments.

18. The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained un- der Section 301 of the Companies Act, 1956.

19. The Company did not have any outstanding debentures during the period.

20. The Company has not raised any money by way of public issue during the period. Hence in our opinion Clause 4(xx) of the Companies (Auditor's Report) Order 2003 (as amended) is not applicable to the Company.

21. 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 explanations given to us 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 ANIL NAIR & ASSOCIATES for CNGSN & ASSOCIATES

Chartered Accountants Chartered Accountants

Registration Number: 000175S Registration Number:004915S

G. ANIL C.N. GANGADARAN

Partner Partner

Membership Number:22450 Membership Number:11205

Chennai, 15th May, 2012

 
Subscribe now to get personal finance updates in your inbox!