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Celebrity Fashions Ltd.

BSE: 532695 Sector: Industrials
NSE: CELEBRITY ISIN Code: INE185H01016
BSE LIVE 15:26 | 02 Dec 10.10 -0.56
(-5.25%)
OPEN

10.80

HIGH

10.80

LOW

10.10

NSE LIVE 15:31 | 02 Dec 10.20 -0.15
(-1.45%)
OPEN

10.80

HIGH

10.80

LOW

10.00

OPEN 10.80
PREVIOUS CLOSE 10.66
VOLUME 3696
52-Week high 18.80
52-Week low 7.79
P/E
Mkt Cap.(Rs cr) 39.39
Buy Price 10.07
Buy Qty 1.00
Sell Price 10.25
Sell Qty 1000.00
OPEN 10.80
CLOSE 10.66
VOLUME 3696
52-Week high 18.80
52-Week low 7.79
P/E
Mkt Cap.(Rs cr) 39.39
Buy Price 10.07
Buy Qty 1.00
Sell Price 10.25
Sell Qty 1000.00

Celebrity Fashions Ltd. (CELEBRITY) - Auditors Report

Company auditors report

To the Members of

Celebrity Fashions Limited

Report on the Financial Statements

We have audited the accompanying financial statements ofCelebrity Fashions Limited("the Company") which comprise the Balance sheet as at March 31 2015 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgement including the assessment of the risks of material misstatementsof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances but not forthe purpose of expressing an opinion on whether the Company has in place an adequateinternal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany’s directors as well as evaluating the overall presentation of financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 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 theCompany has accumulated losses and that more than 50% of its Net Worth has been eroded. Wehave evaluated the appropriateness of the ‘going concern’ concept in accordancewith SA-570 based on such evaluation in our opinion and on the basis of the informationand explanations given to us we report that we have obtained sufficient evidence toestablish the continuance of the Company as a going concern. The financial statements ofthe Company have been prepared on a going concern basis for the reasons stated in the saidNote. 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 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure a statement on the matters specified inparagraphs 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 bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account;

d. in our opinion the aforesaid financial statements comply with the AccountingStandards 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 March31 2015 and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2015 from being appointed as a director in terms of Section164(2) of the Act; and

f. with respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements as referred to in Note 29 to the financialstatements.

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

iii. There has been a delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company which is detailed below: Rs. 33799outstanding since November 13 2013.

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

ANNEXURE TO THE AUDITORS’ REPORT

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

1. In respect of its Fixed Assets:

a. The Company has maintained proper records showing full particulars includingquantitative 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 ofits fixed fixed assets are verified in a phased periodical bywhich designed to cover allthe items over a period of three years. In accordance with this programme certain fixedassets were verified during the year and no discrepancies were noticed on suchverification. In our opinion this periodicity of physical verification is reasonablehaving 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 rawmaterial of the value Rs. 0.99 crores lying in transit for which confirmation has beenobtained have been physically verified during the year by the management. In our opinionthe frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c. According to the information and explanations given to us the Company hasmaintained proper records of inventories. As explained to us there were no materialdiscrepancies 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 orother parties listed in the register maintained under Section 189 of the Companies Act2013. Hence the question of reporting whether the receipt of principal and interest areregular and whether reasonable steps for recovery of over dues of such loans taken do notarise.

4. In our opinion and according to the information and explanations given to us thereis an adequate internal control system commensurate with the size of the Company and thenature of its business with regard to the purchase of fixed assets inventory and for thesale of goods and services. Further on the basis of our examination of the books andrecords of the Company and according to the information and explanations given to us wehave neither observed nor have we been informed of any continuing failure to correct majorweaknesses in the internal control system.

5. According to the information and explanations given to us the Company has notaccepted 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 Indiahas not prescribed the maintenance of cost records under Section 148(1) (d) of theCompanies 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 ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees stateinsurance scheme income tax duty of customs value added tax cess and other materialstatutory dues as applicable have been regularly deposited during the year by the Companywith the appropriate authorities.

However there has been delay in depositing service tax dues with the appropriateauthorities during the year. As explained to us the Company did not have any dues onaccount of duty of excise.

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

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

Name of the Statue Nature of Dues Period to which the amount relates Forum Where the dispute is pending Amount (in Rs..)
Income Tax Act1961 Income Tax 2003-2004 Pending before the Assessing Officer 526669*
Income Tax Act1961 Income Tax 2004-2005 Pending before the Assessing Officer 961087*
Income Tax Act1961 Fringe Benefit Tax 2007-2008 Pending for rectification before the Assessing Officer 699860
Income Tax Act1961 Fringe Benefit Tax 2008-2009 Pending for rectification before the Assessing Officer 601600
Income Tax Act1961 Income Tax 2011-2012 Pending for rectification before the Assessing Officer and appeal before the Commissioner of Income Tax Appeals Chennai 114652
Total 2903868

* Relating to Income Tax dues of partnership firm Celebrity Connections

c. According to the information and explanations given to us the following are theinstances of delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund in accordance with the relevant provisions of the CompaniesAct 1956 (1 of 1956) and rules there under . Rs. 33799 outstanding since November13 2013.

8. The accumulated losses of the Company have exceeded 50% of its net worth as at March31 2015. The Company has not incurred cash losses during the current financial year andin the immediately preceding financial year.Further during the year the Board forIndustrial and Financial Reconstruction (BIFR) has discharged the Company from the purviewof the Sick Industrial Companies Act under section 3(1)(o) vide its order dated 04thAugust 2014.

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

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

11. According to the information and explanations given to us and based on the recordsand documents produced before us in our opinion the term loans have been applied for thepurposes for which they were obtained. 12. According to the information and explanationsgiven to us no material fraud on or by the Company has been noticed or reported during thecourse 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

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