TO THE MEMBERS OF
LYPSA GEMS & JEWELLERY LIMITED
1) Report on the financial statements
We have audited the accompanying financial statements of LYPSA GEMS & JEWELLERYLIMITED which comprise the Balance Sheet as at March 31 2019 the Statement ofProfit and Loss for the year then ended Cash Flow Statements and a summary of significantaccounting policies and other explanatory information.
2) Management responsibility for the financial statement
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 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 of the Companies (Accounts) Rules2014 as prescribed by the Institute of Chartered Accountants of India and otheraccounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatements whether due to fraud or error.
3) Auditors 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 there under.
We conducted our audit in accordance with the Standards on Auditing under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the financialstatements 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 the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness ofthe Company's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating the overall presentation of the financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the said accounts read together with the Notes from 1-24 annexed thereongives the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India
a) In case of the Balance Sheet of the state of the Company's affairs as at 31st March2019
b) In case of the Statement of Profit & Loss Account of the profit for the yearended on that date and
c) Its cash flows for the year ended on that date
5) Report on other legal and regulatorty requirements
As required by the Companies (Auditors' Report) Order 2004 issued by the CentralGovernment in terms of sub section (4A) of Section 227 of the Companies Act 2013 weenclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of thesaid order
6) Further to our comments in the above Para on the basis of our audit wereport that:
a. We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;
b. In our opinion the company has kept proper books of account as required by law sofar as appears from our examination of the books of account;
c. The Balance Sheet and Profit and Loss Account dealt with this report are inagreement with the books of Accounts;
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 written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms ofSection 164(2) of the Act.
f) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:
i. The Company does not have any pending litigations which would impact its financialposition except for outstanding dues of Banks.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses
iii. There is Unclaimed Dividend of Rs. 749900/- of F.Y. 2009-10 & Rs. 827000/-of F Y 2010-11 & Rs 561855/- for F Y 2011-12 which is required to be transferred bythe Company to the Investor Education and Protection Fund. The company has not transferredthe same.
For M/s. Doshi Maru & Associates
ANNEXURE TO THE AUDITORS REPORT
The Annexure referred to in our report to the members of LYPSA GEMS & JEWELLERYLIMITED for the year Ended on March 31st 2019. We report that:
|S. No. ||Particulars ||Auditors Remark |
|(i) ||(a) whether the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets; ||The company has maintained fixed assets register showing full particulars including quantitative details and situation of fixed assets. |
| ||(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so whether the same have been properly dealt with in the books of account; ||The fixed assets has been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification. |
|(ii) ||(a) whether physical verification of inventory has been conducted at reasonable intervals by the management; ||The management has physically verified inventory of stock of raw material and stock of finished goods and frequency of verification is reasonable. |
| ||(b) are the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business. If not the inadequacies in such procedures should be reported; ||In our opinion the procedure for physical verification of stocks i.e. raw material and finished goods as followed by the management is reasonable and adequate in relation to size of the company and nature of its business. |
| ||(c) whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so whether the same have been properly dealt with in the books of account; ||The company is maintaining proper records of inventory. The discrepancies noticed on physical verification were not material and the same have been properly dealt with in the books of accounts. |
|(iii) ||(iii) whether the company has granted any loans secured or unsecured to companies firms or other parties covered in the register maintained under section 189 of the Companies Act. If so ||The company has not granted any loans secured or unsecured to companies firms or other parties covered in the register maintained under section 189 of the Companies Act. |
| ||(a) whether receipt of the principal amount and interest are also regular; and ||As the company has not granted loans this clause is Not Applicable. |
| ||(b) if overdue amount is more than rupees one lakh whether reasonable steps have been taken by the company for recovery of the principal and interest; ||As the company has not granted loans this clause is Not Applicable. |
|(iv) ||Is there an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Whether there is a continuing failure to correct major weaknesses in internal control system. ||According to the information given to us and in our opinion there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase and sale of goods and of fixed assets. During the course of our audit we have not observed any continuing failure to correct major weakness in internal control system. |
|(v) ||In case the company has accepted deposits whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under where applicable have been complied with? If not the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal whether the same has been complied with or not? ||In our opinion and according to the information and explanations given to us we are of the opinion that company has not accepted any deposits during the year in contravention to provisions of section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. |
|(vi) ||where maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act whether such accounts and records have been made and maintained; ||According to the information given to us the maintenance of cost records to the company has not been specified by the Central Government under sub-section (1) of section 148 of the Companies Act. |
|(vii) ||(a) is the company regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax sales-tax wealth tax service tax duty of customs duty of excise value added tax cess and any other statutory dues with the appropriate authorities and if not the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable shall be indicated by the auditor. ||As informed to us there are no undisputed amounts payable in respect statutory dues including provident fund employees' state insurance income-tax sales-tax wealth tax service tax duty of customs duty of excise value added tax cess and any other statutory dues with the appropriate authorities as at the last date of financial year except for Professional Tax of Rs. 31800/- Unclaimed dividend payable for F Y 2009-10 of Rs. 749900/- for F Y 2010-11 of Rs. 827000/- for F Y 2011-12 of Rs. 561855/- for F Y 2012- 13 of Rs. 433587/- for F Y 2013-14 of Rs. 1430020/- for F Y 2014- 15 of Rs. 333282/- Unclaimed Fraction shares for F Y 2013-14 of Rs. 3436/- VAT payable of Rs. 2461771/- TDS payable of Rs. 73808/- that were outstanding for a period of more than six months from the date they became payable. |
| ||(b) in case dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute). ||As there are no outstanding undisputed statutory dues this clause is not applicable except for pending Income Tax appeals. |
| ||(c) whether the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time. ||As per the information provided to us the company is required to transfer a sum of Rs. 749900/- towards Unclaimed Dividend for 2009-10 Rs. 827000/- for 2010-11 & Rs. 561855/- for 2011-12 to Investor Education and protection fund in accordance with the relevant provisions of the Companies Act 2013 (1 of 2013) and rules made thereunder. However company has not transferred the same. |
|(viii) ||whether in case of a company which has been registered for a period not less than five years its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year; ||As on March 31st 2019 the company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit as well as during the immediately preceding financial year. |
|(ix) ||whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes the period and amount of default to be reported; ||On the basis of the records examined by us and the information and explanations given to us the company has defaulted in repayment of dues to Bank. The company's account has turned to NPA status since December 2016. The amount of default in various bank account's is as under : |
| || ||1. Bank of India CC A/c Rs. 9332516/-. |
| || ||2. Bank of India PSC/PSCFC Rs. 44234079/-. |
|(x) ||whether the company has given any guarantee for loans taken by others from bank or financial institutions the terms and conditions whereof are prejudicial to the interest of the company; ||As informed to us the company has not given any guarantee for loans taken by others from bank of financial institutions. |
|(xi) ||whether term loans were applied for the purpose for which the loans were obtained; ||According to the information and explanations given to us and on overall examination of the Balance sheet of the company we report that term loans were applied for the purpose for which the loans were obtained. |
|(xii) ||whether any fraud on or by the company has been noticed or reported during the year; If yes the nature and the amount involved is to be indicated. ||According to the information and explanations given to us no fraud on or by the company has been noticed or reported during the year under audit. |
(xiii) In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Sections 185 and 186 of the Act withrespect to the loans and investments made.
(xiv) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
(xvi) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xvii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Indian Accounting Standard financialstatements as required by the applicable accounting standards.
(xviii) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xx) Company is not required to be registered under Section 45-IA of the Reserve Bankof India Act 1934.
For M/s. Doshi Maru & Associates
(Atul B. Doshi)
Place :- Mumbai
Date : - 30th May 2019