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Opal Luxury Time Products Ltd.

BSE: 500504 Sector: Others
NSE: OPAL ISIN Code: INE520N01012
BSE 05:30 | 01 Jan Opal Luxury Time Products Ltd
NSE 05:30 | 01 Jan Opal Luxury Time Products Ltd

Opal Luxury Time Products Ltd. (OPAL) - Auditors Report

Company auditors report

To the Members of

OPAL LUXURY TIME PRODUCTS LIMITED

Report on the Financial Statements

We have audited the accompanying Standalone financial statements of OPAL LUXURYTIME PRODUCTS LIMITED ("the Company") which comprise the Balance Sheetas at March 31 2017 theStatement of Profit and Loss Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation being submitted by the company pursuant to the requirement of Regulation 33 ofSEBI (Listing Obligation and Disclosure requirements) Regulations 2015.

Management's Responsibility for the Standalone 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 (Standalone) financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit.

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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Standalone financial statements

Basis of qualified Opinion

The carrying cost of tangible / intangible assets as per books has not been subjectedto impairment under Accounting Standard -28 "Impairment of the Assets" as thereis no estimate of recoverable amount made as defined in Accounting Standard.

Qualified Opinion

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In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:

a. In case of Balance Sheet of the state of affairs of the Company as on 31st March2017; b. in case of the Statement of Profit and Loss of the loss for the year ended onthat date; and c. In case of the Cash Flow Statement of the cash flows for the year endedon that date.

Emphasis of Matters

We draw attention to:

Note 2.21 of the financial statements with respect to provisioning of long standingtrade receivables. As per company's policy it has not provided for such long standingtrade receivables despite being outstanding for more than one year under for the reasonsas mentioned in the note.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the

Central Government of India in terms of sub-section (11) of section 143 of the Act wegive in the

" Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act 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 Standalone financial statements comply with theAccounting

Standards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;

e. On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the

Company and the operating effectiveness of such controls refer to our separate Reportin

"Annexure B".

g. 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 opinion and to the best ofour information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and

Protection Fund by the Company. iv. The Company has provided requisite disclosures inits financial statements as to holding as well as dealing in Special Bank Notes during theperiod from 8th November 2016 to 30th December 2016 and these arein accordance with the books of accounts maintained by the Company. Refer to Note 2.34 tothe standalone financial statements.

For and on behalf of

Bharat J Rughani & Co

Chartered Accountants

Firm's registration number: 101220W

CA Akash Rughani

Partner

Membership number: 139664 Place: Mumbai Date: May 29 2017

"Annexure A" to the Independent Auditors' Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the year ended March 31 2017:

1) (a) The Company is in the process of updating the fixed asset register to show fullparticulars including quantitative details and situation of fixed assets at vendorplaces;

(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords and the physical fixed assets have been noticed.

(c) The title deeds of immovable properties are held in the name of the company.

2) a) The management has conducted the physical verification of inventory at reasonableintervals.

b) The Procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to size of the Company and nature of its business.

c) As explained to us the company has been maintaining complete records of inventoriesas per the Statutory Rules. As informed Management has physically verified all majoritems and the discrepancies noticed on verifications were appropriately dealt with.However looking at the size of operation of the company in above opinion the companyneeds to maintain more detailed stock records in order to have better idea as to theutilization and maintenance of stocks.

3) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (C) of theOrder are not applicable to the Company and hence not commented upon.

4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013In respect of loans investments guarantees and security.

5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

6) We have broadly reviewed the books of accounts maintained by the Company in respectof products where pursuant to the rules made by the Central Government of India themaintenance of cost records has been prescribed under specified under section 148(1) ofthe Act and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We however have not made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

7) a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been irregular indepositing undisputed statutory dues including Provident Fund Employees State InsuranceIncome-Tax Sales tax Service Tax Duty of Customs Duty of Excise Value added Tax Cessand any other statutory dues with the appropriate authorities however at the year endthe following statutory dues for a period of more than six months are outstanding fromthe date on when they become payable:

Particulars Amount(Rs.)
Service Tax Payable 375169
EPF Liability 1187606
ESIC Liability 99530
PTEC 25625
Maharashtra VAT 1330467
Tamilnadu VAT 494323
Uttarakhand VAT 649546
Income Tax Payable 152242
Total 4314508

b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.

c) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company in accordance with the relevant provisions ofthe Companies Act and rules made there under.

8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. However as on March 31 2017Letter of Credit (LC) aggregating Rs. 385.68 lakhs were lying devolved due to delay inpayment by the company.The Company has not issued any debentures.

9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.

10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;

12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.

13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.

For and on behalf of

Bharat J Rughani & Co

Chartered Accountants

Firm's registration number: 101220W

CA Akash Rughani Partner

Membership number: 139664 Place: Mumbai Date: May 29 2017

"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Opal Luxury Time Products Limited.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Opal LuxuryTime Products Limited

("the Company") as of March 31 2017 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance

Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based our audit thefollowing material weaknesses have been identified in the operating effectiveness of theholding Company's internal financial controls over financial reporting as at March 312017

1. The Company did not have an appropriate internal control system for updationidentification and valuation of Fixed Assets at vendor places. These could potentiallyresult in material misstatements in carrying cost of tangible fixed assets.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2017financial statements of the Company and these material weakness have affected our opinionon the financial statements of the Company we have issued a qualified opinion on thefinancial statements.

For and on behalf of

Bharat J Rughani & Co

Chartered Accountants

Firm's registration number: 101220W

CA Akash Rughani

Partner

Membership number: 139664 Place: Mumbai Date: May 29 2017