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Shree Ganesh Jewellery House (I) Ltd.

BSE: 533180 Sector: Consumer
NSE: SGJHL ISIN Code: INE553K01019
BSE LIVE 15:15 | 25 Sep 0.94 0.04
(4.44%)
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NSE 15:28 | 23 Jan Stock Is Not Traded.
OPEN 0.90
PREVIOUS CLOSE 0.90
VOLUME 4800
52-Week high 6.60
52-Week low 0.83
P/E
Mkt Cap.(Rs cr) 7
Buy Price 1.80
Buy Qty 21000.00
Sell Price 1.88
Sell Qty 1930.00
OPEN 0.90
CLOSE 0.90
VOLUME 4800
52-Week high 6.60
52-Week low 0.83
P/E
Mkt Cap.(Rs cr) 7
Buy Price 1.80
Buy Qty 21000.00
Sell Price 1.88
Sell Qty 1930.00

Shree Ganesh Jewellery House (I) Ltd. (SGJHL) - Auditors Report

Company auditors report

To

The Members of

SHREE GANESH JEWELLERY HOUSE (I) LIMITED

(Formerly Known as Shree Ganesh Jewellery House Limited)

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SHREE GANESHJEWELLERY HOUSE (I) LIMITED ("the Company") which comprise the BalanceSheet as at 31st March 2015 the Statement of Profit and Loss the Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.

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 there under.

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 ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the company has in place an adequate internal financialcontrol system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Director as well asevaluating the overall presentation of the financial statements.

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

Basis for Qualified opinion

(i) Note No. 52 regarding fixed Deposits amounting to Rs 3031.08 Lacs pledged assecurity with axis bank against cash credit sanctioned was adjusted with cash creditbalance in the company’s book on maturity of the fixed deposits. However as per cashcredit account statement furnished by the bank fixed deposits figure was not adjustedwith the cash credit account balance. Thus cash credit balance as per bank statementshowed excess by Rs 3031.08 lacs;

(ii) Note No. 53 regarding Cash credit balance of Dhanalaxmi bank was Rs 1827.27 Lacsand Rs 91.59 Lacs reflecting less balance in Company’s books. The Company hadcontested the excess amount claimed by the bank in the High Court of Kolkata and hadreceived a stay order on the excess claim made by the bank;

(iii) Note No.7 regarding Cash Credit A/c (Account No: 911030049091869) balance of Rs98641.67 Lacs as on March 31 2015 in which impact of Rs 18.20 Lacs debited by Bank ondated 31st January 2014 and Rs 290.27 Lacs credited by Bank on 28th August 2014 in theCC account has not been considered. These are subject to reconciliation and consequentialimpact if any presently not ascertainable;

(iv) Note No.7 includes Short-term borrowings of Rs 44655.46 Lacs have not beenconfirmed as on March 31 2015 hence we are unable to comment the consequential impact onconfirmation/ reconciliation of such balances if any

We further report that the overall impact of the matters reported by us in theaforesaid paragraphs cannot be determined and commented.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of matter described in the Basis for Qualified Opinionparagraph the aforesaid standalone financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the companyas at 31st March 2015 and its Loss and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following notes :

a) Note No.33 Contingent Liability which describes the uncertainty related to theoutcome of the demand raised against the Company by Sales Tax authorities;

b) Note No. 51 and 54 in the financial statements regarding preparation of theseaccounts on going concern basis and is facing financial crunch with its inability to meetthe financial obligations. The Company had applied for Composite Corporate DebtRestructuring with the banks to mitigate the above which was withdrawn by the banks in theconsortium meeting held on 22nd January 2015. As stated the company had again requestedfor reconsideration of restructuring proposal by all the lenders. These facts have beendisclosed in above referred notes by the management in view of which the accounts havebeen continued to be prepared under the going concern assumption.

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 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 3 and4 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 except asreported in clause (iii) & (iv) of the Basis for Qualified Opinion Paragraph above;

b) Except the effects of matters referred in Basis for Qualified Opinion Paragraphabove 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 theCompanies (Accounts) Rules 2014.

e) The matters described in Basis for Qualified Opinion paragraph and Emphasis ofMatters paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.

f) On the basis of written representations received from the directors as on March 312015 and taken on record by the Board of Directors except two directors none of theother directors is disqualified as on March 31 2015 from being appointed as directorunder the sub-section (2) of Section 164 of the Companies Act.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion Paragraph andEmphasis of Matters paragraph above.

h) 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. (Refer Note No.33(i)& (ii))

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.

For CHATURVEDI & PARTNERS
Chartered Accountants
Firm Registration No.307068E
Sd/-
Pratik Niyogi
Date: 30th May 2015 Partner
Place: Kolkata Membership No.066514

Annexure to the Auditors' Report

(Referred to in Paragraph 1 of "Other Legal and Regulatory requirements" ofour Audit Report)

i) In respect of Fixed Assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b) The Company has a regular program of physical verification of fixed assets by whichfixed assets are verified in a phased manner over a period of three years. In accordancewith this program certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the company and thenature of its assets.

ii) In respect of Inventories:

a) The inventories have been physically verified by the management as at year end. Inour opinion the frequency of such 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) In our opinion and according to the information and explanations given to us theCompany is maintaining proper records of its inventories and no material discrepanciesnoticed on such physical verification.

iii) The Company has granted loans to its subsidiary companies covered in registermaintained under Section 189 of the Companies Act 2013. The maximum amount involvedduring the year and the year-end balance was INR. 6763.51 Lacs and INR. 6763.51 Lacsrespectively.

a) In our opinion and according to the information and explanations given to us therate of interest and other terms and conditions on which loans have been granted to itssubsidiary companies and listed in the register maintained under section 189 of theCompanies Act 2013 are not prima facie prejudicial to the interest of the Company.

b) According to the information and explanation given to us loans granted and interestthereon are recoverable on demand. There are no stipulations made for the recovery of theloan. Hence we cannot comment on the regularity of receipt of principal amounts andinterest thereon.

c) Based on the information and explanations there is no overdue amount outstanding atthe end of the year in respect of the above said loans.

iv) There is an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of inventory fixed assetsand with regard to the sale of goods and services. We have not observed any major weaknessin internal control system during the course of the audit.

v) According to the information and explanations given to us the Company has notaccepted any deposits from the public within the meaning of directives issued by theReserve Bank of India and provisions of Sections 73 to 76 or any other relevant provisionsof the Companies Act 2013 and the rules framed there under.

vi) We have broadly reviewed the cost records maintained by the Company pursuant to theRule made by the Central Government for the maintenance of cost records under Section148(1) of the Companies Act 2013 and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with the view to determine whether they areaccurate or complete.

vii) a) According to the information and explanations given to us and on the basis ofour examination of the books of accounts the Company is generally been depositedregularly the undisputed statutory dues including Provident Fund Employee StateInsurance Income Tax Sales Tax Wealth Tax Service Tax Duty of Customs Duty ofExcise Value Added Tax Cess and any other statutory dues with the appropriateauthorities except delay in some cases and some of the amounts are still not paid asdetailed below:-

Service Tax -Rs 2.20 Lacs and

Sales Tax -Rs 94.68 Lacs

Except West Bengal Value Added Tax aggregating of' 41.34 Lacs there were noun-disputed statutory dues as at the end of the year concerned outstanding for a period ofmore than six months from the date they became payable.

b) According to the information and explanations given to us there were no dues ofWealth Tax Custom Duty and Cess which have not been deposited with the appropriateauthorities on account of any dispute. Based on the information and explanationsavailable the following Sales Tax dues have not been deposited with the appropriateauthorities on account of Dispute:-

Sl. No. Name of the Status Nature of Dues Amount (Rs In Lacs) Period to which the Amount Relates Forum Where the dispute is Pending
1. West Bengal Sales Tax Act/ Central Sales Tax Act Claim of Export rejected by Appellate Authority on ground of non accepting Form 12A on quarterly basis but the commercial taxes authority issued it on quarterly basis. 291.07 2006-07 Revisional Board Sales tax Kolkata (South Circle)
2. West Bengal Sales Tax Act/ Central Sales Tax Act Export Sales and Input Tax Credit disallowed and Gross Turnover enhanced by 63%. 1807.33 2007-08 Appellate Authority Sales Tax Kolkata (South Circle)
3. West Bengal Sales Tax Act/ Central Sales Tax Act Input tax disallowed due to Purchase / Sale from the same party and further Purchase tax levied on fixed assets purchased during the year. 27.44 2008-09 Appellate Authority Sales Tax Kolkata (South Circle)
4. West Bengal Sales Tax Act/ Central Sales Tax Act Tax on sales at branch outside the State of West Bengal @ 12.5% and CST sales taxed @ 1% thereon. 519.46 2009-10 Appellate Authority Sales Tax Kolkata (South Circle)
5. West Bengal Sales Tax Act/ Central Sales Tax Act Disallowance of export sale and purchase tax on Unregistered purchase. 2078.83 2010-11 Senior Joint Commissioner Kolkata (South Circle)
6 West Bengal Sales Tax Act/ Central Sales Tax Act Disallowance of "Form F' 83.18 2011-12 Appellate Authority Sales Tax Kolkata (South Circle)

c) According to the information and explanations given to us there is no amountrequired to be transferred to investor education and protection fund in accordance withthe relevant provisions of the Companies Act1956 (1 of 1956) and rules made there underduring the year.

viii) The Company has no accumulated losses at the end of the financial year and hasincurred cash losses amounting to Rs 76037.33 Lacs during current financial year. TheCompany had incurred cash losses in the immediately preceding financial year also.

ix) In our opinion and according to the information and explanations given to us theCompany has defaulted in repayment of dues to its banker and debenture holders. TheCompany has applied for reconsideration of Composite Corporate Debt Restructuring asstated by the management in Note No.51 of the financial statements.

x) In our opinion and according to the information given to us in respect of theguarantee given by the Company for the loans taken by others from a bank the terms andconditions thereof are not prima facie prejudicial to the interest of the company.

xi) In our opinion and according to the information and explanations given to us theterm loans have been applied for the purpose for which they were raised.

xii) As represented to us by the management and based on our examination of the booksand records of the Company in accordance with the generally accepted auditing practices inIndia we have neither come across any material fraud on or by the Company noticed orreported during the year nor we have been informed of any such case by the management thatcauses the financial statements to be materially misstated.

For CHATURVEDI & PARTNERS
Chartered Accountants
Firm Registration No.307068E
Sd/-
Pratik Niyogi
Date: 30th May 2015 Partner
Place: Kolkata Membership No.066514