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Auditor Report of Narbada Gems & Jewellery Ltd.

Mar 31, 2014

Report on Financial Statements

We have audited the accompanying financial statements of Narbada Gems & Jewellery Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss for the year than ended on that date and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible tor 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 Companies Act, 1956. 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 (he 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 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 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 Company''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 trial 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, together with the Accounting Policies and Notes to Accounts, 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 31,2014;

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

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 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 and the Statement of Profit and Loss, 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 comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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.

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 Auditors'' Report

(Referred to in Paragraph 2 of our report of even date)

1. The Company during the earlier years bought one item viz. vehicles relating to fixed assets which is entered in the Fixed Assets Register. The same is still in use. Hence the question of physical verification and disposal does not arise

2. In respect of its inventories:

a. The inventories have been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of the said stocks 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 the said stocks. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. The company did not take nor granted any loans, secured or unsecured, from or to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act. 1956, during the year. However, it had taken temporary interest-free unsecured loans from directors in the earlier years and repaid the entire amount during the year. These were not prejudicial to the interests of the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assts and also for the sale of goods.

5. In our opinion and according to the information and explanations given to us, the Company entered into the register the transactions in pursuance of Section 301 of the Companies Act, 1956, aggregating during the year to more than Rs.5,00,000/-(Rupees Five lakhs only) in respect of two parties. These transactions have been made at the prevailing market price at the relevant time.

6. The Company has not accepted any deposits from the public.

7. The Company is yet to introduce the system of Internal Audit.

8. The Central Government did not prescribe maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956(Act I of 1956) for any of the products of the Company.

9. During the year, there is no person to whom the provisions of P.F. or E.S.l. are applicable. According to information and explanations given to us, there are no other undisputed statutory payments outstanding to be deposited for more than six months from the date they became payable.

10. As per the accounts referred to in this Report, the net-worth of the Company has been eroded beyond 50% as on March 31,2013. The Company did not incur cash losses during the financial year under report and also in the preceding financial year.

11. The Company does not have any dues to a financial institution or bank during the year.

12. In our opinion and according to the information and explanations 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.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause-4(xiii) of the Companies(Auditors'' Report) Order, 2003, is not applicable to the Company.

14. The Company has not dealt in or traded in shares, securities, debentures and other investments.

15. The Company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company has not raised any new term loans during the year.

17. The Company during the year did not raise any short term loans and hence the question of their usage does not arise.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by Way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For VENUGOPAL & CHENOY, Firm Registration No. 004671S CHARTERED ACCOUNTANTS,

(P.V.SRI HARI) Hyderabad Partner 30.05.2014 Membership No.21961


Mar 31, 2010

We have audited the attached Balance Sheet of Narbada Gems and Jewellery Ltd. Hyderabad, as at March 31, 2010, and the Profit & Loss Account for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on 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.

1. 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003, 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 hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 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, 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred in sub-section(3C) of section 211 of the Companies Act, 1956;

e) In our opinion, and based on information and explanations given to us, none of the directors are disqualified as on March 31, 2010 , from being appointed as directors in terms of clause(g) of sub-section(l) of section 274 of the Companies Act, 1956;

f) 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 Significant Accounting Policies and Notes to Accounts thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) In so far as it relates to Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

(ii) In so far as it relates to the Profit & Loss Account, of the Profit of the Company for the year ended on that date; and

(iii) In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.



Annexure to Auditors Report



(Referred to in Paragraph 2 of our report of even date)

1. The Company does not have any fixed assets during the year.

2. In respect of its inventories:

a. The inventories have been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of the said stocks 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 the said stocks. As explained to

us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. The company did not take nor granted any loans, secured or unsecured, from or to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, during the year. However, it had taken temporary interest-free unsecured loans from directors. These are not prejudicial to the interests of the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assts and also for the sale of goods.

5. In our opinion and according to the information and explanations given to us, the Company entered into the register the transactions in pursuance of Section 301 of the Companies Act, 1956, aggregating during the year to more than Rs.5,00,000/-(Rupees Five lakhs only) in respect of one party. These transactions have been made at the prevailing market price at the relevant time.

6. The Company has not accepted any deposits from the public.

7. The Company is yet to introduce the system of Internal Audit.

8. The Central Government did not prescribe maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956(Act I of 1956) for any of the products of the Company.

9. During the year, there is no person to whom the provisions of P.F. or E.S.I, are applicable. According to information and explanations given to us, there are no other undisputed statutory payments outstanding for more than six months from the date they became payable.

10. As per the accounts referred to in this Report, the net-worth of the Company has been eroded beyond 50% as on March 31, 2010. The Company did not incur cash losses during the financial year under report and also in the preceding financial year.

11. The Company does not have any outstandings to a financial institution or bank during the year.

12. In our opinion and according to the information and explanations 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.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause-4(xiii) of the Companies(Auditors Report) Order, 2003, is not applicable to the Company.

14. The Company has not dealt in or traded in shares, securities, debentures and other investments.

15. The Company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company has not raised any new term loans during the year.

17. The Company during the year did not raise any short term loans and hence the question of their usage does not arise.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For VENUGOPAL & CHENOY,

CHARTERED ACCOUNTANTS,

Firm Registration No. 004671S

Place : Hyderabad (P.V.SRI HARI)

Date : 04.09.2010 Partner

Membership No.21961

 
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