Mar 31, 2015
We have audited the accompanying financial statements of Eastern Silk
Industries Limited which comprise the Balance Sheet as at 31st March,
2015, the Statement of Profit and Loss and Cash Flow Statement for the
year then ended and a summary 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 Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to 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
principles generally accepted in India, including the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014. This responsibility also
includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgements and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
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 have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included
in the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the
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 judgement, 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 entity's internal control. An audit also
includes evaluating the appropriateness of accounting policies used
and the reasonableness of the accounting estimates made by the
management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide 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
explanations given to us, the aforesaid financial statements 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, of the state of affairs of the Company as
at 31st March, 2015, and its loss and its cash flows for the year
ended on that date.
EMPHASIS OF MATTER
We draw attention to;
a) Note No. 33 (b) to the financial statements which states that the
company has not provided interest to lenders amounting to Rs. 6,557.70
lacs
b) Note No. 35 to the financial statements which states that the
company is a BIFR company pending registration as per the provisions
of the SICA Act 1985.
c) Note No. 36(a) to the financial statements which states that a
fresh provision of Rs. 3,697.22 Lacs has been made during the year for
bad & doubtful debts, thus aggregating to Rs. 12,665.10 Lacs as at 31st
March 2015 against a total Overdue Trade Receivables of Rs. 29,468.25
lacs, of which Rs. 16,803.15 Lacs is considered good for recovery by the
management. We are unable to express any opinion on correctness and/or
adequacy of the provision for bad & doubtful debts.
d) Note No. 37 to the financial statements regarding non recognition
of Net Deferred Tax Assets (DTA) of Rs. 429.77 lacs in the accounts. We
are unable to express any opinion regarding non-recognition of DTA and
about its adjustment against future profits of the company.
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 of the Companies Act, 2013, we give in
the Annexure, a statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.
2. As required by section 143(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, Statement of Profit and Loss and Cash Flow
Statement, 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,
and Cash Flow Statement comply with the Accounting Standards specified
under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
e) On the basis of written representation received from the directors
as at 31st March, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as at 31st March, 2015, from
being appointed as a director in terms of Section 164 (2) of the Act.
f) In our opinion, the internal financial controls over financial
reporting of the Company and the operating effectiveness of such
controls are adequate.
g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
* The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note No.27 to
the financial statements
* The Company has no long-term contracts including derivative
contracts hence no provision is required under the applicable law or
accounting standards
* There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS
i) a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The management has physically verified certain fixed assets during
the year in accordance with a programme of verification, which, in our
opinion, provides for physical verification of the fixed assets at
reasonable intervals having regard to the size of the Company and
nature of its assets. According to the information and explanations
given to us no material discrepancies were noticed on such
verification.
c. In our opinion and according to explanations given to us, Fixed
Assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the
Company.
ii) a. As explained to us, inventories have been physically verified
by the management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the book records.
iii) 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 Act and as such clauses (iii) (a) and (b) of
the order are not applicable to the company.
iv) 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 nature of its business
for the purchase of inventory, fixed assets and also for the sale of
goods and services. During the course of our audit, we have not
observed any major weakness in internal controls.
v) The Company has not accepted any deposits from the public and as
such clause (v) of the Order is not applicable.
vi) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 148(1) of the Act, and we
are of the opinion that prima facie the prescribed accounts and
records have been made and maintained. However, we have not made a
detailed examination of such accounts and records.
vii) According to the information and explanations given to us in
respect of the statutory dues:
a. The Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income Tax, Wealth Tax, Sales Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other applicable statutory
dues with the appropriate authorities during the year. According to
the information and explanations given to us, no undisputed amounts
payable in respect of the aforesaid dues were outstanding as at 31st
March, 2015 for a period of more than six months from the date they
became payable.
b. According to the information and explanations given to us, details
of dues of Customs Duty/ Excise Duty/Income Tax & Sales Tax, Wealth
Tax, Service Tax and Cess which have not been deposited on account of
any dispute are as follows :
c. Required amount was transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act,2013 and rules made there under.
viii) The Company's accumulated losses at the end of the financial
year under Audit has eroded more than 100% of the net worth. The
company has incurred Cash Losses during the financial year and in the
immediately preceding financial year.
ix) In our opinion and according to the information and explanation
given to us the company has defaulted in repayment of the following
amount to Banks & to Financial Institutions :
a) Term Loan Rs. 5,341.59 Lacs
b) Other Loans Rs. 38,472.59 Lacs
c) * Interest Rs. 8,951.87 Lacs
* Rs. 2,394.17 Lacs provided in Statement of Accounts and Rs. 6,557.70
Lacs not provided in the Statement of Accounts.
x) In our opinion and according to the information and explanation
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.
xi) The company has not obtained any fresh term loans during the year
under review. Accordingly, the provisions of clause (xi) of the Order
are not applicable to the company.
xii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
(L.K.Shroff)
Place : Kolkata PARTNER
Date : The 30th May, 2015 Membership No. : 060742
Mar 31, 2014
We have audited the accompanying financial statements of Eastern Silk
Industries Limited which comprise the Balance Sheet as at 31st March,
2014, the Statement of Profit and Loss and Cash Flow Statement for the
year then ended and a summary of significant accounting policies and
other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for 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 the 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 the 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 judgement, 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 entity''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 that 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 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 31st March, 2014;
b) In the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
EMPHASIS OF MATTER
We draw attention to;
a) Note no. 35 to the financial statements which states that the losses
of the Company for the year and preceding years as per Books of
Accounts stand at Rs. 38,134.70 lacs (Previous year Rs. 24,489.96 lacs)
as on 31st March, 2014. After adjustment of the losses, the
shareholders funds stands at Rs. (821.08) lacs (Previous year
Rs.12,897.98 lacs). As stated by the management, the Company is
proceeding to file a revival plan before the BIFR under section 15 of
SICA Act, 1985.
b) Note No. 36 to the financial statements which states that Trade
Receivables of Rs. 21,681.81 lacs (Previous year Rs. 21,681.81 lacs)
receivable from overseas buyers towards sale consideration of goods
exported, against which the company has filed money suits in the
Hon''ble High Court Kolkata, which has been considered good for recovery
by the management. We are unable to express any opinion on correctness
and/ or adequacy of the provision for bad & doubtful debts.
c) Note No 38 to the financial statements regarding non recognition of
Net Deferred Tax Assets (DTA) of Rs. 1,828.81 lacs in the accounts
based on lack of future profitability projections made by the
management. However we are unable to express any opinion on the
projection and their consequential impact, if any.
Report on Other Legal and Regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 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, Statement of Profit and Loss and Cash Flow
Statement, 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, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Act;
e) On the basis of written representation received from the directors
as at 31st March, 2014 and taken on record by the Board of Directors,
none of the directors is disqualified as at 31st March, 2014, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Act.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS
i) a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The management has physically verified certain fixed assets during
the year in accordance with a programme of verification, which, in our
opinion, provides for physical verification of the fixed assets at
reasonable intervals having regard to the size of the Company and
nature of its assets. According to the information and explanations
given to us no material discrepancies were noticed on such
verification.
c. In our opinion and according to explanations given to us, Fixed
Assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the Company.
ii) a. As explained to us, inventories have been physically verified
by the management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the book records.
iii) As explained to us and according to the information furnished to
us, the Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 and as
such clause (iii) of the Order is not applicable.
iv) 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 nature of its business
for the purchase of inventory, fixed assets and also for the sale of
goods and services. During the course of our audit, we have not
observed any major weakness in internal controls.
v) In respect of transactions entered in the register maintained under
Sec. 301 of the Companies Act, 1956:
a. To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register pursuant to Section 301 of the Companies
Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies
Act, 1956 and aggregating during the year to Rs. 5 lacs or more in
respect of any party have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public and as
such clause (vi) of the Order is not applicable.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business and needs to be
further strengthened.
viii) We have broadly reviewed the books of account and records
maintained by the Company relating to ''Textiles'' pursuant to Sec.
209(1)(d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of these
records.
ix) According to the information and explanations given to us in
respect of the statutory dues:
a. The Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Wealth Tax, Sales Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other applicable statutory
dues with the appropriate authorities during the year. According to the
information and explanations given to us, no undisputed amounts payable
in respect of the aforesaid dues were outstanding as at 31 March, 2014
for a period of more than six months from the date they became payable.
b. Acccording to the information and explanations given to us, details
of dues of Customs Duty/ Excise Duty/Income Tax & Sales Tax, Wealth
Tax, Service Tax and Cess which have not been deposited on account of
any dispute are as follows :
Name of the Statute Name of the Dues Amount
(Rs. in
lacs)
Central Excise Act Excise Duty and Penalty 26.72
Employees State Employees State Insurance 6.03
Insurance Act
Custom Duty Act Custom Duty 109.77
Customs Duty Act Custom Duty 148.50
Customs Duty Act Custom Duty 78.92
Customs Duty Act Custom Duty 28.70
Customs Duty Act Custom Duty 44.07
Income Tax Act Income Tax 2.31
Income Tax Act Income Tax 71.51
Name of the Statute Period to
which Forum where
the amount dispute is pending
relates
Central Excise Act 2002-03 Deputy Commissioner,
Central Excise
Employees State
Insurance Act 1995-96 & Asst. Director, ESIC
2002-03
Custom Duty Act 2001-02 Hon''ble High Court of
Kamatka
Customs Duty Act 2005-06 Commissioner of Custom
(Port), Kolkata
Customs Duty Act 2003-04 CESTAT, Bangalore
Customs Duty Act 2003-04 Commissioner of Custom
Customs Duty Act 2002-03 Commissioner of Custom
Income Tax Act 2004-05 I.T.A.T (Kolkata)
Income Tax Act 2010-11 I.T.A.T (Kolkata)
x) The Company''s accumulated losses at the end of financial year under
Audit has eroded more than 100% of the net worth. The company has
incurred Cash Losses during the financial year and in the immediately
preceding financial year.
xi) In our opinion and according to the information & explanations
given to us, the Company has not defaulted in repayment of term loan
installment & Interest to Banks and/or to Financial Institutions,
except, Rs. 2,716.42 lacs Interest payable to Banks and Financial
Institutions for which necessary provisions have been made. However, a
sum of Rs. 35.45 lacs have been paid subsequently.
xii) In our opinion and according to the information and explanation
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.
xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit
Fund/Society and as such reporting under clause (xiii) of the Order is
not applicable to the Company.
xiv) Based on our examination of the records and according to the
information and explanations given to us, Company is not dealing or
trading in shares, securities, debentures and other investments. We
also report that the Company has held the shares, securities,
debentures and other investments in its own name.
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
Banks or Financial Institutions.
xvi) The company has not obtained any fresh term loans during the year
under review. Accordingly, the provisions of clause (xvi) of the Order
are not applicable to the company.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that prima facie funds raised on short-term basis have been
not used for long-term investments.
xviii) The Company has not made preferential allotment of shares during
the year to parties and companies covered in the Register maintained
under Section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised any money by public issue during the
year.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
(L.K.Shroff)
Place : Kolkata PARTNER
The 28th May, 2014 Membership No. : 060742
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Eastern Silk
Industries Limited which comprise the Balance Sheet as at 31st March,
2013, the Statement of Profit and Loss and Cash Flow Statement for the
year then ended and a summary of significant accounting policies and
other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for 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 the 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 the 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 judgement, 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. 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 that 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 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 31st March, 2013;
b) In the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
EMPHASIS OF MATTER
We draw attention to ;
a) Note no. 36 to the financial statements which states that the losses
of the Company for the year and preceding years as per Books of
Accounts stand at Rs. 24,489.96 lacs (Previous year Rs. 14,954.05 lacs) as
on 31st March, 2013. After adjustment of the losses, the shareholders
funds stands at Rs. 12,897.98 lacs (Previous year Rs. 25,232.33 lacs). As
stated, the management has a strategic plan for the revival of the
Company and is hopeful in improving the financial health of the Company
in near future. Accordingly the Financial Statement for the year has
been drawn up by the management as per going concern assumption.
b) Note No. 37 to the financial statement which states that Sundry
Debtors of Rs. 24,804.33 lacs (Previous year Rs. 23,536.05 lacs) receivable
from overseas buyers towards sale consideration of goods exported,
against which the company has filed money suits in the Hon''ble High
Court Kolkata, which has been considered good for recovery by the
management. We are unable to express any opinion on correctness and/or
adequacy of the provision for bad & doubtful debts.
c) Note No. 39 to the financial statements regarding recognition of Net
Deferred Tax Assets (DTA) of Rs. 2,193.03 lacs (Previous year Rs. 2,379.95
lacs) in the accounts based on future profitability projection made by
the management. However, we are unable to express any opinion on the
projections and their consequential impact, if any, on the recognition
of such DTA
Report on Other Legal and Regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003. 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:
(i) 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.
(ii) 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;
(iii) The Balance sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(iv) In our opinion, the Balance sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Act;
(v) On the basis of written representation received from the directors
as at 31st March, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified as at 31st March, 2013, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Act.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS
i) a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The management has physically verified certain fixed assets during
the year in accordance with a programme of verification, which, in our
opinion, provides for physical verification of the fixed assets at
reasonable intervals having regard to the size of the Company and
nature of its assets. According to the information and explanations
given to us no material discrepancies were noticed on such
verification.
c. In our opinion and according to explanations given to us, Fixed
Assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the Company.
ii) a. As explained to us, inventories have been physically verified
by the management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the book records.
iii) As explained to us and according to the information furnished to
us, the Company has neither granted nor taken any loans, (except a sum
of Rs. 1,474 lacs-unsecured, interest free, from the promoters) secured
or unsecured, to / from companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956
and as such clause (iii) of the Order is not applicable.
iv) 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 nature of its business
for the purchase of inventory, fixed assets and also for the sale of
goods. During the course of our audit, we have not observed any major
weakness in internal controls.
v) In respect of transactions entered in the register maintained under
Sec. 301 of the Companies Act, 1956:
a. To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register pursuant to Section 301 of the Companies
Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies
Act, 1956 and aggregating during the year to Rs. 5 lacs or more in
respect of any party have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public and as
such clause (vi) of the Order is not applicable.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business and needs to be
further strengthened.
viii) We have broadly reviewed the books of account and records
maintained by the Company relating to ''Textiles'' pursuant to Sec.
209(1)(d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of these
records.
ix) According to the information and explanations given to us in
respect of the statutory dues: a. The Company is generally regular in
depositing undisputed statutory dues including Provident Fund,
Investor''s Education and Protection Fund, Employees'' State Insurance,
Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, Cess and
any other statutory dues with the appropriate authorities during the
year. According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st March, 2013 for a period of more than six months
from the date they became payable.
b. According to the information and explanations given to us, details
of dues of Customs Duty/ Excise Duty/Income Tax & Sales Tax which have
not been deposited on account of any dispute are as follows :
Name of the
Statute Name of the
Dues Amount
(Rs. in lacs)
Central Excise
Act Excise Duty and
Penalty 26.72
Employees State Employees State
Insurance 6.03
Insurance Act
Custom Duty Act Custom Duty 109.77
Customs Duty Act Custom Duty 148.50
Customs Duty Act Custom Duty 78.92
Customs Duty Act Custom Duty 28.70
Customs Duty Act Custom Duty 44.07
Income Tax Act Income Tax 2.31
Income Tax Act Income Tax 71.51
NAME Period to which Forum where
the amount dispute is pending
relate
Custom Duty Act 2002-03 Deputy Commissioner,
Central Excise
Custom Duty Act 1995-96 & Asst. Director, ESIC
2002-03
Custom Duty Act 2001-02 Hon''ble High Court of
Kamatka
Custom Duty Act 2005-06 Commissioner of Custom
(Port), Kolkata
Custom Duty Act 2003-04 CESTAT, Bangalore
Custom Duty Act 2003-04 Commissioner of Custom
Custom Duty Act 2002-03 Commissioner of Custom
Custom Duty Act 2004-05 I.T.A.T (Kolkata)
Custom Duty Act 2010-11 I.T.A.T (Kolkata)
x) The Company has accumulated losses at the end of financial year and
has also incurred cash losses during the financial year covered by our
audit .The company has also incurred cash losses in the previous
financial year.
xi) In our opinion and according to the information & explanations
given to us, the Company has not defaulted in repayment of term loan
installment & Interest to Banks and/or to Financial Institutions.
xii) In our opinion and according to the information and explanation
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.
xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit
Fund/Society and as such reporting under clause (xiii) of the Order is
not applicable to the Company.
xiv) Based on our examination of the records and according to the
information and explanations given to us, Company is not dealing or
trading in shares, securities, debentures and other investments. We
also report that the Company has held the shares, securities,
debentures and other investments in its own name.
xv) According to the information and explanations given to us, the
Company has given a corporate guarantee to a bank for an Associate
Company for Rs. 650.00 Lacs for availing loan from bank by the said
Company, the terms of conditions of which are not prima facie
prejudicial to the interest of the Company.
xvi) The company has not obtained any fresh term loans during the year
under review. Accordingly, the provisions of clause (xvi) of the Order
are not applicable to the company.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that prima facie funds raised on short-term basis have been
not used for long-term investments.
xviii) The Company has not made preferential allotment of shares during
the year to parties and companies covered in the Register maintained
under Section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised any money by public issue during the
year.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
(L.K.Shroff)
23A, Netaji Subhas Road, PARTNER
Kolkata Membership No. : 60742
The 29th May, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of EASTERN SILK
INDUSTRIES LTD. as at 31st March, 2012 and also the Statement of Profit
& Loss and the Cash Flow Statement for the year ended on that date,
annexed thereto. These financial statements are the responsibility of
the Company's Management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. 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 misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 as
amended by the Companies (Auditor's Report Amendment) Order 2004 issued
by the Central Government of India in terms of Sub-Section (4A) of
Section 227 of the Companies Act, 1956 and on the basis of such checks
as were considered appropriate and according to the information and
explanations given to us, we enclose in the Annexure a statement on the
matter specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, We report that-
I. we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of
our audit;
II. 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;
III. the Balance Sheet, Statement of Profit & Loss and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
IV. in our opinion, the Balance Sheet, Statement of Profit & Loss
Account and the Cash Flow Statement dealt with by this report comply
with the Accounting Standards referred to in clause (3C) of Section 211
of the Companies Act, 1956, subject to our comment in Para-VI below.
V. on the basis of written representation received from the Directors
and taken on record by the Board of Directors, we report that none of
the Directors is disqualified as on 31s1 March, 2012 from being
appointed as a Director in terms of clause (g) of Sub-Section (I) of
Section 274 of the Companies Act, 1956;
VI. without qualifying our opinion, attention is drawn to the
following notes-
a) Note no. 34 states that the losses of the Company for the year and
preceding year as per Books of Accounts stand at Rs 14,954.05 Lacs as
on 31s1 March, 2012. As stated, the management has a strategic plan for
the revival of the Company and it is hopeful in improving the financial
health of the Company in near future. Accordingly the Financial
Statement for the year has been drawn up by the management as pergoing
concern assumption.
b) Note no. 36 states that Sundry Debtors of Rs.23536.04 lacs (Previous
year Rs.24172.76 lacs) receivable from overseas buyers towards sale
consideration of goods exported, which has been considered good for
recovery by the management. We are unable to express any opinion on
correctness and/or adequacy of the Provision for Bad & Doubtful Debts.
VII. attention is drawn to the following Note-
Note No.37 regarding recognition of Net Deferred Tax Assets (DTA) of
Rs. 2,379.95 lacs in the accounts as at 31.03.2012 based on future
profitability projection made by the management. However we are unable
to express any opinion on the projections and their consequential
impact, if any on the recognition of such DTA.
Had the impact of above item not been considered, there would have been
a loss of Rs.11,555.21 lacs as against the reported loss of Rs.
9,160.43 lacs for the year and the Reserves & Surplus account would
have been lower by Rs. 2,394.78 lacs against the reported figure of
Rs.22,253.28 lacs as on the balance sheet date.
VIII. in our opinion and to the best of our information and according
to the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give , in the prescribed
manner, the information required by the Act 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 31s1 March, 2012.
(b) in the case of the Statement of Profit & Loss of the Loss for the
Year ended on that date; and
(c) in the case of the Cash Flow Statement, of the Cash Flows for the
Year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
i) a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The management has physically verified certain fixed assets during
the year in accordance with a programme of verification, which, in
our opinion, provides for physical verification of the fixed assets at
reasonable intervals having regard to the size of the Company and
nature of its assets. According to the information and explanations
given to us no material discrepancies were noticed on such
verification.
c. In our opinion and according to explanations given to us, Fixed
Assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the Company.
ii) a. As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the book records.
iii) As explained to us and according to the information furnished to
us, the Company has neither granted nor taken any loans, (except a sum
of Rs.734 lacs-unsecured, interest free, from the Chairman and Managing
Director & his wife) secured or unsecured, to/from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956 and as such clause (iii) of the Order is not
applicable.
iv) 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 nature of its business
for the purchase of inventory, fixed assets and also for the sale of
goods. During the course of our audit, we have not observed any major
weakness in internal controls.
v) In respect of transactions entered in the register maintained
under Sec. 301 of the Companies Act, 1956:
a. To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register pursuant to Section 301 of the Companies
Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies
Act, 1956 and aggregating during the year to Rs.5 lacs or more in
respect of any party have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public and as
such clause (vi)of the Order is not applicable.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business and needs to be
further strengthened.
viii) We have broadly reviewed the books of account and records
maintained by the Company relating to 'Textiles' pursuant to Sec. 209(1
)(d) of the Companies Act, 1956 and are of the opinion that prima facie
the prescribed accounts and records have been made and maintained. We
have, however, not made a detailed examination of these records.
ix) According to the information and explanations given to us in
respect of the statutory dues:
a. The Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income Tax, Wealth Tax, Sales Tax, Customs
Duty, Excise Duty, Cess and any other statutory dues with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of the aforesaid dues were outstanding as at 31s1 March, 2012 for a
period of more than six months from the date they became payable.
b. According to the information and explanations given to us, details
of dues of Customs Duty/ Excise Duty/ Sales Tax which have not been
deposited on account of any dispute are as follows:
Name of the Statute Name of the Dues Amount
(Rs in lacs)
Central Excise Act Excise Duty and Penalty 26.72
Employees State Employees State Insurance 6.03
Insurance Act
Custom Duty Act Custom Duty 109.77
Customs Duty Act Custom Duty 148.50
Customs Duty Act Custom Duty 78.92
Customs Duty Act Custom Duty 28.70
Customs Duty Act Custom Duty 44.07
Income Tax Act Income Tax 2.31
Name of the Statute Period to which Forum where
the amount dispute is
relates pending
Central Excise Act 2002-03 Deputy Commissioner,
Central Excise
Employees State 1995-96 & Asst. Director, ESIC
2003-03
Custom Duty Act 2001-02 Hon'ble High Court of
Karnataka
Customs Duty Act 2003-04 CESTAT, Bangalore
Customs Duty Act 2003-04 Commissioner of Custom
Customs Duty Act 2002-03 Commissioner of Custom
Income Tax Act 2004-05 I.T.A.T (Kolkata)
x) The Company has no accumulated losses at the end of financial year
but has incurred cash losses during the financial year covered by our
audit .The company has also incurred cash losses in the previous
financial year.
xi) In our opinion and according to the information & explanations
given to us, the Company has not defaulted in repayment of term loan
installment& Interest to Banks and/or to Financial Institutions.
xii) In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security byway of pledge of shares, debentures and other
securities.
xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit
Fund/Society and as such reporting under clause (xiii)of the Order is
not applicable to the Company.
xiv) Based on our examination of the records and according to the
information and explanations given to us, Company is not dealing or
trading in shares, securities, debentures and other investments. We
also report that the Company has held the shares, securities,
debentures and other investments in its own name.
xv) According to the information and explanations given to us, the
Company has given a corporate guarantee to a bank for an Associate
Company for Rs. 650.00 Lacs for availing loan from bank by the said
Company, the terms of conditions of which are not prima facie
prejudicial to the interest of the Company.
xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
company were, prima facie, applied by the company during the year for
the purposes for which the loans were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that prima facie funds raised on short-term basis have been
not used for long-term investments.
xviii) The Company has not made preferential allotment of shares during
the year to parties and companies covered in the Register maintained
under Section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised any money by public issue during the
year.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
(L.K.Shroff)
PARTNER
Membership No. : 60742
Mar 31, 2011
1. We have audited the attached Balance Sheet of EASTERN SILK
INDUSTRIES LTD. as at 31 st,March, 2011 and also the Profit & Loss
Account and the Cash Flow Statement for the year ended on that date,
annexed thereto. These financial statements are the responsibility of
the Company's Management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. 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 misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 as
amended by the Companies (Auditor's Report Amendment) Order 2004 issued
by the Central Government of India in terms of Sub-Section (4A) of
Section 227 of the Companies Act, 1956 and on the basis of such checks
as were considered appropriate and according to the information and
explanations given to us, we enclose in the Annexure a statement on the
matter specified in paragraphs 4 and 5 of the said Order.
4. Furtherto ourcomments in the Annexure referred to in paragraph 3
above, We report that-
I. we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
II. 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;
III. the Balance Sheet, Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
IV. in our opinion, the Balance Sheet, Profit & Loss Account and the
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in clause (3C) of Section 211 of the
Companies Act, 1956, subject to our comment in Para-VII below.
V. on the basis of written representation received from the Directors
and taken on record by the Board of Directors, we report that none of
the Directors is disqualified as on 31st March, 2011 from being
appointed as a Director in terms of clause (g) of Sub-Section (I) of
Section 274 of the Companies Act, 1956;
VI. In our opinion the valuation of closing stock has been overstated
by the Company by Rs. 92.46 crores as at 31st March 2011. This is due
to the lower realisation of finished goods in the subsequent periods
and a substantial stock being non/slow moving, the lower realisation in
the value of stocks have not been fully captured in the accounts by the
management. Only a sum of Rs.34.70 crores has been accounted for in the
Profit & Loss Account towards lower realisable value of stock. Had the
entire lower realisable value been accounted, the loss for the year
ended 31st March, 2011 would have been Rs 150.40 crores and Reserves &
Surplus would have been lower by Rs.92.46 crores.
VII. Without qualifying our opinion, attention is drawn to the
following notes in Schedule 14 :
a) Note No. 12 - Provision for Bad & Doubtful debts, on which we are
unable to express any opinion on correctness and/or adequacy of the
provision.
b) Note No. 9 -As at the Balance Sheet date the losses of the Company
stands at Rs 57.94 crores as against the shareholders' fund of Rs
331.40 crores (including revaluation reserve of Rs 42.11 crores). As
stated in the said note the management has a future plan for the
revival of the Company and is confident and hopeful of improving
financial health in the near future. Accordingly the financial
statements for the year have been drawn up by the management as per the
going concern assumption.
VIII. in our opinion and to the best of our information and according
to the explanations given to us, the said accounts, read together with
Accounting Policies and the Notes thereon appearing in schedule - 14
give the information required by the Companies Act, 1956 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 31st March, 2011.
(b) in the case of the Profit & Loss Account of the Loss for the year
ended on that date; and
(c) in the case of the Cash Flow Statement of the Cash Flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
I) a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The management has physically verified certain fixed assets during
the year in accordance with a programme of verification, which in our
opinion provides for physical verification of the fixed assets at
reasonable intervals having regard to the size of the Company and
nature of its assets. According to the information and explanations
given to us no material discrepancies were noticed on such
verification.
c. In our opinion and according to explanations given to us, Fixed
Assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the Company.
ii) a. As explained to us, inventories have been physically verified
by the management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the book records.
iii) As explained to us and according to the information furnished to
us, the Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 and as
such clause (iii) of the Order is not applicable.
iv) 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 nature of its business
for the purchase of inventory, fixed assets and also for the sale of
goods. During the course of our audit, we have not observed any major
weakness in internal controls.
v) In respect of transactions entered in the register maintained under
Sec. 301 of the Companies Act, 1956:
a. To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register pursuant to Section 301 of the Companies
Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies
Act, 1956 and aggregating during the year to Rs.5 lakhs or more in
respect of any party have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public and as
such clause (vi) of the Order is not applicable.
vii) In our opinion, the Company has an adequate interna! audit system
commensurate with the size and nature of its business and needs to be
further strengthened.
viii) We have broadly reviewed the books of account and records
maintained by the Company relating to Textiles' pursuant to Sec. 209(1
)(d) of the Companies Act, 1956 and are of the opinion that prima facie
the prescribed accounts and records have been made and maintained. We
have, however, not made a detailed examination of these records.
ix) According to the information and explanations given to us in
respect of the statutory dues:
a. The Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income Tax, Wealth Tax, Sales Tax, Customs
Duty, Excise Duty, Cess and any other statutory dues with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of the aforesaid dues were outstanding as at 31st March, 2011 for a
period of more than six months from the date they became payable except
42.93 Lacs since paid.
b. According to the information and explanations given to us, details
of dues of Customs Duty/ Excise Duty/Sales Tax which have not been
deposited on account of any dispute are as follows:
Name of the Name of the Amount Period Forum where
Statute Dues (Rs. in to which dispute is
lacs) the amount pending
relate
Central Excise Excise Duty 26.72 2002-03 Deputy Commis-
Act and Penalty sioner,
Central
Excise
Employees State Employees 6.03 1995-96 & Asst.Director,
Insurance Act State Insur 2002-03 ESIC
-ance
Custom Duty Act Custom Duty 109.77 2001-02 Hon'ble High
Court of
Karnatka
Customs Duty Act Custom Duty 148.50 2005-06 Commissioner
of Custom
(Port),
Kolkata
Customs Duty Act Custom Duty 78.92 2003-04 CESTAT,
Bangalore
Customs Duty Act Custom Duty 28.70 2003-04 Commissioner
of Custom
Customs Duty Act Custom Duty 44.07 2002-03 Commissioner
of Custom
Income Tax Act Income Tax 2.31 2004-05 I.T.A.T
(Kolkata)
x) The Company has no accumulated losses at the end of financial year
but has incurred cash losses during the financial year covered by our
audit .The company has not incurred cash losses in the previous
financial year.
xi) In our opinion and according to the information & explanations
given to us, the Company has not defaulted in repayment of term loan
installment & Interest to Banks. However in the repayment of term loan
installments amounting to Rs. 150.00 Lacs due in Apr'10, July'10,
Oct'10 & Jan'11 respectively due to State Bank of India were
paidinJuly'10, Sep'10, Jan'11 & Feb'11 respective and repayment of
interest is as follows:
Bank Period (Rs. In Lacs) Amount
Payment Date
State Bank of
India May'10 22.14 02.07.10
June'10 21.61 01.07.10
July'10 21.52 01.11.10
Aug'10 26.29 01.11.10
Sep'10 30.79 22.12.10
Oct'10 27.93 22.12.10
Nov'10 27.95 04.02.11
Dec'10 28.98 04.02.11
Jan'11 28.33 04.02.11
Feb'11 23.77 12.05.11
Mar'11 26.23 12.05. & 30.06.11
Exim Bank 20th
Feb'11
To 27.47 20.06.11
19th
Mar'11
xii) In our opinion and according to the information and explanation
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.
xiii)' The Company is not a Chit Fund or a Nidhi / Mutual Benefit
Fund/Society and as such reporting under clause (xiii) of the Order is
not applicable to the Company.
xiv) Based on our examination of the records and according to the
information and explanations given to us, Company is not dealing or
trading in shares, securities, debentures and other investments. We
also report that the Company has held the shares, securities,
debentures and other investments in its own name.
xv) According to the information and explanations given to us, the
Company has given a corporate guarantee to a bank for an Associate
Company for Rs. 650.00 Lacs for availing loan from bank by the said
Company, the terms of conditions of which are not prima facie
prejudicial to the interest of the Company.
xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
company were, prima facie, applied by the company during the year for
the purposes for which the loans were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that prima facie funds raised on short-term basis have been
not used for long-term investments.
xviii). The Company has not made preferential allotment of shares
during the year to parties and companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
xix). The Company has not issued any debentures during the year.
xx). The Company has not raised any money by public issue during the
year.
xxi). To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
(L.K.Shroff)
23A, Netaji Subhas Road, PARTNER
Kolkata, the 2nd August, 2011 Membership No. : 60742
Mar 31, 2010
1. We have audited the attached Balance Sheet of EASTERN SILK
INDUSTRIES LTD. as at 31stMarch, 2010 and also the Profit & Loss
Account and the Cash Flow Statement for the year ended on that date,
annexed thereto. 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.
2. 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 misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Auditors Report Amendment) Order 2004 issued
by the Central Government of India in terms of Sub-Section (4A) of
Section 227 of the Companies Act, 1956 and on the basis of such checks
as were considered appropriate and according to the information and
explanations given to us, we enclose in the Annexure a statement on the
matter specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, We report that -
I. we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
II. 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;
III. the Balance Sheet, Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
IV. in our opinion, the Balance Sheet, Profit & Loss Account and the
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in clause (3C) of Section 211 of the
Companies Act, 1956.
V. on the basis of written representation received from the Directors
and taken on record by the Board of Directors, we report that none of
the Directors is disqualified as on 31st March, 2010 from being
appointed as a Director in terms of clause (g) of Sub-Section (I) of
Section 274 of the Companies Act, 1956;
VI. in our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with
Accounting Policies and the Notes thereon appearing in schedule - 14
give the information required by the Companies Act, 1956 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 31st
March, 2010.
(b) in the case of the Profit & Loss Account of the Profit for the year
ended on that date; and
(c) in the case of the Cash Flow Statement of the Cash Flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
i) a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The management has physically verified certain fixed assets during
the year in accordance with a programme of verification, which in our
opinion provides for physical verification of the fixed assets at
reasonable intervals having regard to the size of the Company and
nature of its assets. According to the information and explanations
given to us no material discrepancies were noticed on such
verification.
c. The Company has not disposed off substantial Fixed Assets during the
year. Therefore, it has not affected the going concern concept of the
Company.
ii) a. As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification as compared to the book records.
iii) As explained to us and according to the information furnished to
us, the Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 and as
such clause (iii) of the Order is not applicable.
iv) 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 nature of its business
for the purchase of inventory, fixed assets and also for the sale of
goods. During the course of our audit, we have not observed any major
weakness in internal controls.
v) In respect of transactions entered in the register maintained under
Sec. 301 of the Companies Act, 1956:
a. To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register pursuant to Section 301 of the Companies
Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies
Act, 1956 and aggregating during the year to Rs.5 lakhs or more in
respect of any party have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public and as
such clause (vi) of the Order is not applicable.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business and is being
further strengthened.
viii) We have broadly reviewed the books of account and records
maintained by the Company relating to ÃTextiles pursuant to Sec.
209(1)(d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of these
records.
ix) According to the information and explanations given to us in
respect of the statutory dues:
a. The Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Customs
Duty, Excise Duty, Cess and any other statutory dues with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of the aforesaid dues were outstanding as at 31st March, 2010 for a
period of more than six months from the date they became payable.
b. According to the information and explanations given to us, details
of dues of Customs Duty/ Excise Duty/ Sales Tax which have not been
deposited on account of any dispute are as follows :
Name of the Statute Name of
the Dues Amount Period to Forum where
dispute is
(Rs. in
lacs) which the pending
amount
relates
Central Excise Act Excise Duty
and Penalty 26.72 2002-03 Deputy
Commissioner,
Central Excise
Employees State Employees
State 6.03 1995-96 & Asst. Director,
ESIC
Insurance Act Insurance 2002-03
Custom Duty Act Custom Duty 109.77 2001-02 Honble High
Court ofKarnatka
Customs Duty Act Custom Duty 148.50 2005-06 Commissioner of
Custom (Port),
Kolkata
Customs Duty Act Custom Duty 78.92 2003-04 CESTAT,
Bangalore
Customs Duty Act Custom Duty 28.70 2003-04 Commissioner of
Custom
Customs Duty Act Custom Duty 44.07 2002-03 Commissioner of
Custom
Income Tax Act Income Tax 2.31 2004-05 C.I.T. (Appeal)
x) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit or the
immediately preceding financial year.
xi) In our opinion and according to the information & explanations
given to us, the Company has not defaulted in repayment of term loan
installment to Banks. However in the repayment of term loan installment
amounting to Rs.18.85 Lacs due in May09 & Rs.18.85 Lacs due in
August09 to Uco Bank and interest thereon Rs.1.28 Lacs & Rs. 0.73 Lacs
were paid in July09 & September09 respectively.
xii) In our opinion and according to the information and explanation
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.
xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit
Fund/Society and as such reporting under clause (xiii) of the Order is
not applicable to the Company.
xiv) Based on our examination of the records and according to the
information and explanations given to us, Company is not dealing or
trading in shares, securities, debentures and other investments. We
also report that the Company has held the shares, securities,
debentures and other investments in its own name.
xv) According to the information and explanations given to us, the
Company has given a corporate guarantee to a bank for an Associate
Company for Rs. 650.00 Lacs for availing loan from bank by the said
Company, the terms of conditions of which are not prima facie
prejudicial to the interest of the Company.
xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
company were, prima facie, applied by the company during the year for
the purposes for which the loans were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that prima facie funds raised on short-term basis have not
been used for long-term investments.
xviii). The Company has not made preferential allotment of shares
during the year to parties and companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
xix). The Company has not issued any debentures during the year.
xx). The Company has not raised any money by public issue during the
year.
xxi). To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
23A, Netaji Subhas Road, (L.K.Shroff)
Kolkata, the 10th August, 2010. PARTNER
Membership No. : 60742