Mar 31, 2016
INDEPENDENT AUDITORS'' REPORT
1. REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Supreme Tex Mart Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Profit and Loss Statement, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.
2. MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE 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 standalone 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments 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.
3. AUDITORS'' RESPONSIBILITY
Our responsibility is to express an opinion on these standalone 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 misstatements.
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 judgment, 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, 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 standalone financial statements
4. Emphasis on matter
The Company has incurred a net loss of Rs, 17884.09 lacs during the year ended 31st March, 2016, which exceeds the net worth of the company, and as on that date, the companyRs,s current liabilities exceeded its current assets by Rs, 15297.67 lacs and its total liabilities exceeded its total assets by Rs, 18653.78 lacs. The lead bank (SBI) and member banks i.e. Central Bank of India, Union Bank of India, SBER Bank, Allahabad Bank & IDBI Bank have classified the accounts of the company as non performing assets. These events cast significant doubt on the Company''s ability to continue as a going concern. The appropriateness of the going concern assumption is dependent on the company® ability to establish consistent profitable operations and generate positive cash flows as well as raising adequate finance to meet its short term and long term obligations.
5. BASIS FOR QUALIFIED OPINION Further we report that
i. The Company has not provided for the Interest on borrowings from banks which have not charged interest on account of accounts classified as non-performing assets. This notional amount of interest as calculated by taking last rate of interest charged by the banks comes to Rs,3525.28 lacs.
ii. The earnings (loss) per share for the year ended March 31,2016 would have been Rs, (31.38) against reported earnings (loss) per share of Rs, (26.21)
iii. Provision for Gratuity and leave encashment is made on an estimated basis, without Actuarial valuation, which is not in accordance with Accounting Standard -15 on Employee Benefits.
6. QUALIFIED OPINION
In our opinion and to the best of our information and according to the explanations given to us subject to our comments in paragraph 5 above, the aforesaid standalone 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 March 31, 2016, and its loss and its cash flows for the year ended on that date.
7. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor''s Report) Order, 2016 issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the Annexure A, a statement on the matters specified in Paragraphs 3 and 4 of the order, to the extent applicable.
8. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Profit and Loss Statement, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except with the requirement of Accounting Standard (AS)-15 on "Employee Benefits notified by the Companies (Accounts) Rules, 2014;
e) On the basis of the written representations received from the directors as on March 31, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
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:
(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 26 to the financial statements.
(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts.
The company is not required to transfer any amount to the Investor Education and Protection Fund.
The Annexure referred to in our independent Auditors Report to the members of the company on the financial statements for the year ended 31st March 2016, we report that
(i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were indentified on such verification. In our opinion company does not have any reasonable program having regard to the size of the company and the nature of its fixed assets.
(c) According to the information and explanations given to us and based on our examination of the records of the company, title deeds of immovable properties are held in the name of the company.
(ii) (a) The Management has conducted physical verification of inventory at reasonable intervals during the year. However the Scope and coverage of physical verification needs to enhanced to make it commensurate with the size and nature of the business of the company.
(b) The procedures of physical verification of inventory followed by the management needs to be strengthened to make it reasonable and adequate in relation to the size of the company.
(c) The company is maintaining proper records of inventory and material discrepancies were noticed on physical verification which have been properly dealt with in the books of account;
(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 Companies Act, 2013.
(iv) In our opinion and according to information & explanation given to us, the Company has complied with the provisions of section 185 & 186 of the Act, with respect to the loans & investments made.
(v) In our opinion and according to information & explanation given to us, the company has not accepted any deposits for which directives issued by Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under are applicable for compliance.
(vi) According to the information and explanation given to us, maintenance of cost records has been specified by the Central Government under sub section (1) of section 148 of the Companies Act, 2013.
(vii) (a) The company has not been 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.
In our opinion and according to the information and explanation given to us, undisputed dues in respect of provident fund, employees state insurance and income tax which were outstanding at the yearend for a period of more than six months from the date they become payable are as follow:
Nature of Statue |
Nature of Dues |
Amount (Rs,In lacs) |
Period to which the amounts relate |
Due date |
Date of Payment |
Income Tax Act, 1961 |
Income Tax |
480.12 |
FY 2012-13 |
30/11/2013 |
Not yet paid |
Employees [State Insurance Act, 1948 |
Employee State Insurance |
1.57 |
July 2015 |
21/08/2015 |
Not yet paid |
Employees [State Insurance Act, 1948 |
Employee State Insurance |
1.54 |
August 2015 |
21/09/2015 |
Not yet paid |
Employees [State Insurance Act, 1948 |
Employee State Insurance |
1.46 |
September 2015 |
21/10/2015 |
Not yet paid |
Employees [Provident Fund and Miscellaneous Provision Act, 1952 |
Provident Fund |
2.19 |
May 2015 |
20/06/2015 |
16/04/2016 |
Employees [Provident Fund and Miscellaneous Provision Act, 1952 |
Provident Fund |
0.70 |
June 2015 |
20/07/2015 |
16/04/2016 |
Employees [Pro vident Fund and Miscellaneous Provision Act, 1952 |
Provident Fund |
3.52 |
July 2015 |
20/08/2015 |
11/04/2016 & 19/04/2016 |
Employees [Provident Fund and Miscellaneous Provision Act, 1952 |
Provident Fund |
3.48 |
August 2015 |
20/09/2015 |
11/04/2016 & 19/04/2016 |
Employees [Provident Fund and Miscellaneous Provision Act, 1952 |
Provident Fund |
1.36 |
September 2015 |
20/10/2015 |
11/04/2016 |
Employees [Provident Fund and Miscellaneous Provision Act, 1952 |
Provident Fund |
1.99 |
September 2015 |
20/10/2015 |
Not yet paid |
a) According to the information and explanation given to us, the disputed statutory dues aggregating to Rs,4.15 lacs that has not been deposited on account on matters pending before the appropriate authority in respect of Service tax and central Sales Tax are given below: -
Name of the Statute |
Nature of Dues |
Disputed Amount (Rs, In lacs) |
Period to which the amounts relates |
Forum Where Dispute is pending |
Central Sales Tax |
Penalty |
1.20 |
2012-13 |
Joint director cum Deputy Excise and Taxation Commissioner (Appeal) |
Central Sales Tax |
Penalty |
1.13 |
2013-14 |
Joint director cum Deputy Excise and Taxation Commissioner (Appeal) |
Service Tax |
Service Tax, interest & Penalty |
1.82 |
2004-05, 2005-06 |
Commissioner of Customs (Appeal) |
(viii) According to information and explanation given to us, the company has default in repayment of dues to banks and financial institutions. The detail of default are as under:
Sr. No. |
Particulars |
Amount (Rs,in Lacs) |
Nature of dues |
Period of default of repayment |
1. |
State Bank of India |
596.57 |
Interest (Term loan) |
01.08.2014 to 31.03.2015 (8 months) |
784.00 |
Principal |
|||
1071.12 |
Interest (Term loan) |
01.04.2015 to 31.03.2016 (12 months) |
||
1250.64 |
Principal |
|||
2. |
Central Bank of India |
179.63 |
Interest (Term loan) |
01.07.2014 to 31.03.2015 (9 months) |
423.00 |
Principal |
|||
570.72 |
Interest (Term loan) |
01.04.2015 to 31.03.2016 (12 months) |
||
564.00 |
Principal |
|||
3. |
State Bank of India |
661.95 |
Interest (working capital) |
01.07.2014 to 31.03.2015 (9 months) |
1029.49 |
Interest (working capital) |
01.04.2015 to 31.03.2016 (12 months) |
||
4. |
Union Bank of India |
19.10 |
Interest (working capital) |
01.03.2015 to 31.03.2015 (1 month) |
249.48 |
Interest (working capital) |
01.04.2015 to 31.03.2016 (12 months) |
||
5. |
Central Bank of India |
56.46 |
Interest (working capital) |
01.07.2014 to 31.03.2015 (9 months) |
208.63 |
Interest (working capital) |
01.04.2015 to 31.03.2016 (12 months) |
||
6. |
SABER Bank |
157.07 |
Interest (working capital) |
01.09.2014 to 31.03.2015 (7 months) |
299.06 |
Interest (working capital) |
01.04.2015 to 31.03.2016 (12 months) |
||
7. |
Allahabad Bank |
96.78 |
Interest (working capital) |
01.10.2015 to 31.03.2016 (6 months) |
35.33 |
Principal |
01.04.2015 to 31.03.2016 (12 months) |
a) Interest includes interest accrued on long term and short term borrowing not provided in the statement of profit and loss.
(ix) The company did not raise any money by way of initial public offer or further public offer (including debt instruments). Company has raised vehicles loans amounting to Rs, 49.84 lacs & they were applied for the purposed for which they are raised.
(x) According to the information and explanations given to us, no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) According to the information and explanations given to us and based on our examination of the records of the company, the company has paid or provided the managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule ? V to the Companies Act.
(xii) In our opinion and according to the information and explanations given to us, the company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the company, all transactions with the related parties are in compliance with section 177 & 188 of Companies Act, 2013 and the details of such transactions have been disclosed in the Financial Statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the company, company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the company, company has not entered into any non-cash transactions with directors or persons connected with them. Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For NANDA & BHATIA
Chartered Accountants
F.R.N. : 004342N
Sd/-
Place: Ludhiana P.C.S. VIRDI
Dated: 30th May, 2016 Partner
M. No.017056
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Supreme Tex Mart Limited ("the Company"), which comprise the Balance
Sheet as at March 31,2015, the Profit and Loss Statement, the Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
2. MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE 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 standalone 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 the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
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
3. AUDITORS' RESPONSIBILITY
Our responsibility is to express an opinion on these
standalone 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 misstatements.
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 judgment, 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 financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Company's directors, 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 standalone
financial statements
4. Emphasis on matter
a) The Company has incurred a net loss of Rs.20834.44 lacs during the
year ended 31st March, 2015, which exceeds the net worth of the
company, and as of that date, the company's current liabilities
exceeded its current assets by Rs.3445.82 lacs and its total liabilities
exceeded its total assets by Rs.769.69 lacs. The lead bank (SBI) and
member banks i.e. Central Bank of India and UCO Bank have not
restructured their total debts upto 31st March 2015. These events cast
significant doubt on the Company's ability to continue as a going
concern. The appropriateness of the going concern assumption is
dependent on the company's ability to establish consistent profitable
operations and generate positive cash flows as well as raising adequate
finance to meet its short term and long term obligations.
b) The management of the company has represented to us that they have
devalued its inventory to the tune of Rs.5308.66 lacs as an exceptional
item. The quantity and Valuation of Inventory has been verified by an
independent Stock Auditor. Accordingly we are relying on his report
and management's representation regarding stock valuation.
5. BASIS FOR QUALIFIED OPINION
Further we report that
i. The company has not arranged to make available the confirmations
and/or reconciliations to verify the balances stated in the financial
statements in respect of:
a. Trade Receivables Rs.7409.47 lacs( Net of provision)
b. Loans and Advances: Rs.4214.23 lacs
c. Trade payables: Rs.6962.64 lacs,
We have also not been able to perform any alternative procedures with
regard to verification of the aforesaid balances and thereby have been
unable to obtain sufficient appropriate audit evidence regarding the
aforesaid accounts .We are unable to comment upon the difference, if
any, which may arise upon the receipt of confirmations and/or the
carrying out of such reconciliation.
ii. The company has made provision for doubtful debts of Rs. 2786.42
Lacs for which no suitable basis has been provided to us.
iii. The management of the company has represented to us that the
recoverable amount of assets within the meaning of Accounting Standard
28 "Impairment of Assets" is more than their carrying value and as
such no amount needs to be recognized in the financial statements for
impairment loss. In the absence of the workings of impairment having
been prepared and made available to us for our review, we are unable to
comment on whether the company needs to make a provision in respect of
impairment loss on such assets and the amount of such provision.
iv. The Company has not provided for the Interest on borrowings
amounting to Rs. 1241.78 lacs and penal interest of Rs.21.08lacs
pertaining to year ended on 31st March, 2015.
v. The earning (loss) per share for the year ended March 31,2015 would
have been Rs.(30.99) against reported earning (loss) per share of
Rs.(30.54).
vi. Provision for Gratuity is made on an estimated basis, without
Actuarial valuation, which is not in accordance with Accounting
Standard -15 on Employee Benefits.
6. QUALIFIED OPNION
In our opinion and to the best of our information and according to the
explanations given to us subject to our comments in paragraph 5 above,
the aforesaid standalone 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 March 31, 2015, and
its profit and its cash flows for the year ended on that date.
7. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor's Report) Order, 2015 issued by
the Central Government of India in terms of subsection (11) of Section
14 of the Act, we give in the Annexure a statement on the matters
specified in Paragraphs 3 and 4 of the order, to the extent applicable.
8. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) The Balance Sheet, the Profit and Loss Statement, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014 except with
the requirement of Accounting Standard (AS)-15 on "Employee
Benefit" notified by the Companies (Accounts) Rules, 2014;
e) On the basis of the written representations received from the
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015,
from being appointed as a director in terms of Section 164 (2) of the
Act.
f) 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:
(I) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements as referred to in Note
Note 27 to the financial statements.
(ii) The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
and as required on long-term contracts including derivative contracts.
(iii) The company is not required to transfer any amount to the
Investor Education and Protection Fund.
Annexure to the Auditor's Report
The Annexure referred to in our independent Auditors Report to the
members of the company on the financial statements for the year ended
31st March 2015, we report that
(i) (a) The company has maintaind proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) Fixed assets have been physical verified by the management during
the year and no material discrepancies were indentified on such
verification. In our opinion company does not have any reasonable
program having regard to the size of the company and the nature of its
assets.
(ii) a. The Management has conducted physical verification of inventory
at reasonable intervals during the year. However the Scope and coverage
of physical verification needs to enhanced to make it commensurate with
the size and nature of the business of the company.
b. The procedures of physical verification of inventory followed by the
management needs to be strengthened to make it reasonable and adequate
in relation to the size of the company.
c. The company is maintaining proper records of inventory and material
discrepancies were noticed on physical verification which have been
properly dealt with in the books of account;
(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 Companies Act 2013.
(iv) The Company does not have 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.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly revived the books of accounts maintained by the
company pursuant to the rules made by Central Government under
sub-section (1) of section 148 of the Companies Act 2013, related to
the manufacture of products of the company, and are of the opinion that
prima facie, the prescribed accounts and reco rds have been made and
maintained. We have not, however, made a detailed examination of the
same.
(vii) (a) The company has not been regular in depositing undisputed
statutory dues including provident fund, employees' state insurance,
income-tax and any other statutory dues with the appropriate
authorities.
In our opinion and according to the information and explanation given
to us, undisputed dues in respect of provident fund, employees' state
insurance and income tax which were outstanding at the year end for a
period of more than six months from the date they become payable are as
follow:
Nature of Statue Nature of Amount Period to
Dues (Rs. In which the
lacs) amounts
relates
Income Tax Act, 1961 Income Tax 480.12 FY 2012-13
Employee 0.85 August 2014
State
Insurance
Employees' State Employee 1.40 August 2014
Insurance Act, 1948 State
Insurance
Employees' State Employee 0.43 September
Insurance Act, 1948 State 2014
Insurance
Employees' Provident Provident 3.87 August 2014
Fund and Fund
Miscellaneous
Provision Act, 1952
Employees Provident Provident 3.40 August 2014
Fund and Fund
Miscellaneous
Provision Act, 1952
Employees' Provident Provident 4.52 September
Fund and Fund 2014
Miscellaneous
Provision Act, 1952
Nature of Statute Due date Date of
Payment
Income Tax Act, 1961 3011112013 Not yet, paid
Income Tax Act, 1961 2110912014 0910412015
Employees' State Insurance Act, 1948 2110912014 2110412015
Employees' State Insurance Act, 1948 2111012014 2210412015
Employees' Provident Fund and
Miscellaneous Provision Act, 1952 2010912014 1510412015
Employees' Provident Fund and
Miscellaneous Provision Act, 1952 2010912014 Not yet paid
Employees' Provident Fund and
Miscellaneous Provision Act, 1952 2011012014 Not yet. paid
b. According to the information and explanation given to us, the
disputed statutory dues aggregating to Rs.4.15 lacs that has not been
deposited on account on matter s pending before the appropriate
authority in respect of Service tax and central Sales Tax are given
below:
Name of the Nature of Dues Disputed Period to which
Statute Amount (Rs. In the amounts
lacs) relates
Central Sales Penalty 1.20 2012-13
Tax
Central Sales Penalty 1.13 2013-14
Tax
Service Tax Service Tax 0.88 2004-05, 2005 -
06
Name of the Statute Forum Where Dispute is pending
Central Sales Tax Joint director cum Deputy Excise and
Taxation Commissioner (Appeal)
Central Sales Tax Joint director cum Deputy Excise and
Taxation Commissioner (Appeal)
Service Tax Commissioner of Customs (Appeal)
c. According to information and explanation given to us the company is
not required to transfer any amount to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 2013 and rules made there under.
(viii) In our opinion and according to information and explanation
given to us, the accumulated losses at the end of financial year are
more than fifty percent of its net worth. Further, the company has
incurred cash losses of Rs.15626.66 during the financial year covered
under audit.
(ix) According to information and explanation given to us, the company
has default in repayment of dues to banks and financial institutions.
The detail of default are as under:
Sr Particulars Amount (Rs. Nature of dues Period of default of
No. in Lacs) repayment
1. State Bank of India 596.57 Interest (Term 01.08.2014 to
loan 31.03.2015
784.00 Principal (8 months)
2. Central Bank of India 179.63 Interest (Term 01.07.2014 to
loan 31.03.2015
(9 months)
423.00 Principal
3. UCO Bank 3.14 Interest (Term 01.02.2015 to
loan 31.03.2015
18.75 Principal (2 months)
4. State Bank of India 661.95 Interest (worki 01.07.2014 to
ng Capital 31.03.2015
(9 months)
5. Union Bank of India 19.10 Interest (worki 01.03.2015 to
ng Capital 31.03.2015
(1 month)
6. Central Bank of India 56.46 Interest (worki 01.07.2014 to
ng Capital 31.03.2015
(9 months)
7. SABER Bank 157.07 Interest (worki 01.09.2014 to
ng Capital 31.03.2015
(7 months)
a) Interest includes interest accrued on long term and short term
borrowing not provided in the statement of profit and loss (Refer note
No.43)
(x) The Company had given guarantee to bank & financial institutions
for loans taken by others to the extent of Rs. 440 lacs, the terms and
conditions where of were prejudicial to the interest of the company to
the extent company had not cpmplied with the relevant provisions of
Companies Act. However the said guarantee was withdrawn during the
year.
(xi) According to the information and explanation given to us, during
the year the company has not taken any term loan;
(xii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
period covered by our audit.
For Ashish Agarwal & Co
Chartered Accountants
F.R.N.: 010788N
sd/-
ASHISH AGARWAL
Place: Ludhiana Partner
Date: 30th May, 2015 M .No.:089579
Mar 31, 2014
We have audited the accompanying financial statements of Supreme Tex
Mart Limited ("the Company") which comprise the balance sheet as at 31
March 2014, the statement of profit and loss and the 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 ("the Act") read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. 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 judgment, 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:
(i) in the case of the balance sheet, of the state of affairs of the
Company as at 31 March 2014;
(ii) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended, 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 Companies Act, 1956 read with
the General Circular 15/2013 dated 13 September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013.
; and
v) On the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to the Independent Auditors'' Report
The Annexure referred to in our report to the members of Supreme Tex
Mart Limited ("the Company") for the year ended 31 March, 2014. We
report that:
1. In respect of fixed assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) According to the information and explanations given to us, the fixed
assets have been physically verified by the management during the year.
No discrepancies were noticed on such physical verification. In our
opinion, the frequency of physical verification of fixed assets is
reasonable having regard to the size of the company and nature of its
business.
c) According to the information and explanations given to us, the
company has not disposed off substantial part of its fixed assets
during the year.
2. In respect of its inventories:
a) According to the information and explanations given to us, the
inventories have been physically verified by the management at the
close of year. In our opinion the frequency of verification is
reasonable.
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 as evidenced by the written procedures and
instructions are reasonable and adequate in relation to the size of the
company and nature of its business.
c) The Company is maintaining proper records of inventory. As explained
to us, no material discrepancies were noticed on physical verification
between physical stocks and book records.
2. a) According to the information and explanations given to us, the
company has not granted loans secured or unsecured to companies, firm
or other parties covered in the register maintained under section 301
of the Companies Act, 1956.
b) In respect of loans, secured or unsecured, taken by the company from
companies, firms or other parties covered in the register maintained
under section 301of the companies Act, 1956, according to information
and explanations given to us:
The company has taken unsecured loan during different time of the year
aggregating Rs. 9.25 crore from one party & paid Rs. 12.98 crore to two
parties covered in the register maintained under section 301 of the
Companies Act, 1956. The maximum amount involved during the year was
Rs. 22.23 crore and the year end balance of loans taken from such
parties was Rs. 9.25 crore.
In our opinion, the rate of interest and other terms and conditions of
the said loan are not, prima facie, prejudicial to the interest of the
company. The loan is repayable on demand.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and nature of its business, for the
purchase of inventory and fixed assets and sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
5. a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding Rupees five lacs or more in
respect of each party during the year, have been made at prices which
are reasonable having regard to the prevalent market prices at the
relevant time.
6. According to the information and explanations given to us, the
company has not accepted deposits covered under the provisions of
section 58A and 58AA or any other relevant provisions of the Companies
Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975. No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
7. In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
9. a) According to the records of the company, undisputed statutory
dues including provident fund, investor education and protection fund,
employees'' state insurance, sales tax, wealth tax, service tax, customs
duty, excise duty, cess and other material statutory dues except income
tax, applicable to the company, if any, have been regularly deposited
with appropriate authorities. 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, 2014, for a
period of more than six months from the date they become payable except
undisputed income tax payable of Rs. 4,80,12,000/- for previous year
ended on 31.03.2013 has not been deposited with Income Tax Authorities
& has been outstanding for more than six months.
b) According to the information and explanations given to us, there are
no disputed statutory dues that have not been deposited on account of
matters pending before the appellate authorities.
10. The company does not have accumulated losses. The latter part of
the question relating to net worth is thus not applicable to the
company. Further, the company has not incurred cash losses during the
financial year covered under audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks and financial institutions.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4(xii) of the Companies (Auditor''s
Report) Order 2003 are not applicable to the company.
13. The company is not a chit fund or a nidhi mutual benefit
fund/society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor''s Report) Order 2003 are not applicable to the
company.
14. According to the information and explanations given to us, the
company has not dealt or traded in share, securities, debentures and
other investments. Therefore, the provisions of clause 4(xiv) of the
Companies (Auditor''s Report) Order 2003 are not applicable to the
company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks. Accordingly the provisions of 4(xv) of the Companies (Auditor''s
Reports) Order 2003 are not applicable to the company.
16. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were obtained.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long term
investment.
18. According to the information and explanations given to us, the
company has made preferential allotment to the parties and companies
covered in the register maintained under section 301 of the Companies
Act, 1956 during the year. In our opinion and according to the
information and explanations given to us, the price at which such
shares have been issued is not prejudicial to the interest of the
company.
19. According to the information and explanations given to us, the
company has not issued debentures during the year. Accordingly the
provisions of clause 4(xix) of the Companies (Auditor''s Report) Order
2003 are not applicable to the company.
20. According to the information and explanations given to us, the
company has not raised money by way of public issue during the year.
Accordingly, the provisions of clause 4(xx) of the above said order are
not applicable to the company.
21. Based upon the audit procedures performed and the information and
explanations given to us, no fraud on or by the company has been
noticed or reported during the year ended 31st March 2014.
For Ashish Agarwal & Co.
Chartered Accountants
Firm Reg. No.010788N
S/d-
Ludhiana Ashish Agarwal
May 30, 2014 Partner
M. No. 089579
Mar 31, 2013
1.We have audited the attached balance sheet of M/s Supreme Tex Mart
Limited as at 31st March, 2013, the profit and 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. These 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 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 issued by
the Central Government of India in terms of sub-section (4A) of Section
227 of the Companies Act, 1956, we enclose in the annexure a statement
on the matters specified in paragraph 4 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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)ln 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, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d)ln our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
e)The Company has received written representations from the directors
as on 31st March, 2013, except from the nominees directors under
section 274(1 )(g) of the Companies Act, 1956, which have been taken on
record by the Board of Directors. We have been informed that the
nominee directors are not required to comply with the requirements of
the aforesaid section 274(1 )(g) of the Companies Act, 1956 pursuant to
the relevant notification issued by the Central Government;
We report that none of the director is disqualified as on March 31st,
2013 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
f) As indicated in Note No. 17, the Company has not provided for
doubtful debts in respect of debtors outstanding for over 2 years and
we have relied on the representations received from the management with
respect to the recoverability of these debtors.
Subject to above, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts read
together with the significant accounting policies and other notes
thereon 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:
i) in the case of balance sheet, of the state of affairs of the Company
as at 31st March, 2013; ii) in the case of the statement of profit and
loss, of the profit for the year ended on that date; and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
1. In respect of fixed assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) According to the information and explanations given to us, the fixed
assets have been physically verified by the management during the year.
No discrepancies were noticed on such physical verification. In our
opinion, the frequency of physical verification of fixed assets is
reasonable having regard to the size of the Company and nature of its
business.
c) According to the information and explanations given to us, the
Company has not disposed off substantial part of its fixed assets
during the year.
2.1n respect of its inventories:
a) According to the information and explanations given to us, the
inventories have been physically verified by the management at the
close of year. In our opinion the frequency of verification is
reasonable.
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 as evidenced by the written procedures and
instructions are reasonable and adequate in relation to the size of the
Company and nature of its business.
c) The Company is maintaining proper records of inventory. As explained
to us, no material discrepancies were noticed on physical verification
between physical stocks and book records
3. a) According to the information and explanations given to us, the
Company has not granted loans secured or unsecured to companies, firm
or other parties covered in the register maintained under section 301
of the Companies Act, 1956. b) In respect of loans, secured or
unsecured, taken by the Company from companies, firms or other parties
covered in the register maintained under section 301 of the companies
Act, 1956, according to information and explanations given to us:
The Company has taken unsecured loans amounting to ''12.98 crore from
two parties covered in the register maintained under section 301 of the
Companies Act,1956. The maximum amount involved during the year was
Rs.12.98 crore.
In our opinion the rate of interest and other terms and conditions of
the said loan are not, prima facie, prejudicial to the interest of the
Company. The loan is repayable on demand.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventory and fixed assets and sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
5. a)ln our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register maintained under that section. b)ln our opinion and according
to the information and explanations given to us, the transactions made
in pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 and exceeding
Rupees five Lacs or more in respect of each party during the year, have
been made at prices which are reasonable having regard to the prevalent
market prices at the relevant time.
6. According to the information and explanations given to us the
Company has not accepted deposits covered under the provisions of
section 58Aand 58AAor any other relevant provisions of the Companies
Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975. No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
7. In our opinion the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
9. a) According to the records of the Company, undisputed statutory
dues including provident fund, investor education and protection fund,
employees'' state insurance, income tax, sales tax, wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
applicable to the Company, if any, have been regularly deposited with
appropriate authorities. 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 become payable. b) According to the
information and explanations given to us, there are no disputed
statutory dues that have not been deposited on account of matters
pending before the appellate authorities.
10. The Company does not have accumulated losses. The latter part of
the question relating to net worth is thus not applicable to the
Company. Further, the Company has not incurred cash losses during the
financial year covered under audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks and financial institutions.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of share, debentures and other securities. Therefore,
the provisions ofclause4(xii)ofthe Companies (Auditor''s Report) Order
2003 are not applicable to the Company.
13. The Company is not a chit fund or a nidhi mutual benefit
fund/society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor''s Report) Order 2003 are not applicable to the
Company.
14. According to the information and explanations given to us, the
Company has not dealt or traded in share, securities, debentures and
other investments. Therefore, the provisions of clause 4(xiv) of the
Companies (Auditor''s Report) Order 2003 are not applicable to the
Company.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks. Accordingly the provisions of 4(xv) of the Companies (Auditor''s
Reports) Order 2003 are not applicable to the Company.
16. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were obtained.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investment.
18. According to the information and explanations given to us, the
Company has not made preferential allotment to the parties and
companies covered in the register maintained under section 301 of the
Companies Act, 1956.
19. According to the information and explanations given to us, the
Company has not issued debentures during the year. Accordingly the
provisions of clause 4(xix) of the Companies (Auditor''s Report) Order
2003 are not applicable to the Company.
20. According to the information and explanations given to us, the
Company has not raised money by way of public issue during the year.
Accordingly, the provisions of clause 4(xx) of the above said order are
not applicable to the Company.
21. Based upon the audit procedures performed and the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year ended 31s1 March 2013.
For Ashish Agarwal & Co.
Chartered Accountants
Firm Reg. No.010788N
ASHISH AGARWAL
Partner Ludhiana
M. No. 089579
May 30,2013
Mar 31, 2012
1. We have audited the attached balance sheet of M/s Supreme Tex Mart
Limited as at 31st March, 2012, the profit and 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. These 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 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 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the annexure a
statement on the matters specified in paragraph 4 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
e) The Company has received written representations from the directors
as on 31st March, 2012, except from the nominees directors under
section 274(1 )(g) of the Companies Act, 1956, which have been taken on
record by the Board of Directors. We have been informed that the
nominee directors are not required to comply with the requirements of
the aforesaid section 274(1 )(g) of the Companies Act, 1956 pursuant to
the relevant notification issued by the Central Government;
We report that none of the director is disqualified as on March 31st,
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
f) As indicated in Note No. 37 there is significant uncertainty
associated with the derivative options referred to in the said note,
resolution of which is dependent upon future events which are not under
the direct control of the company, on account of which the company
could not determine the possible loss, if any, on valuation of open
derivative options. The ultimate outcome of these future events and
their affect on the financial statements cannot be ascertained at this
stage.
Subject to above, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts read
together with the significant accounting policies and other notes
thereon 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:
i) in the case of Balance Sheet, of the state of affairs of the company
as at 31 st March, 2012;
ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
(i) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) According to the information and explanations given to us, the fixed
assets have been physically verified by the management during the year.
No discrepancies were noticed on such physical verification. In our
opinion, the frequency of physical verification of fixed assets is
reasonable having regard to the size of the company and nature of its
business.
c) According to the information and explanations given to us, the
company has not disposed off substantial part of its fixed assets
during the year.
(ii) a) According to the information and explanations given to us, the
inventories have been physically verified by the management at the
close of year. In our opinion the frequency of verification is
reasonable.
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 as evidenced by the written procedures and
instructions are reasonable and adequate in relation to the size of the
company and nature of its business.
c) The Company is maintaining proper records of inventory. As explained
to us, no material discrepancies were noticed on physical verification
between physical stocks and book records.
(iii) a) According to the information and explanation given to us, the
company has not granted loans secured or unsecured to companies, firm
or other parties covered in the register maintained under section 301
of the Companies Act, 1956. Accordingly the provisions of clause 4
(iii) (b) (c) and (d) of the above said order are not applicable to the
company.
b) According to the information and explanation given to us, the
company has not taken loans secured or unsecured from companies, firm
or other parties covered in the register maintained under section 301
of the Companies Act, 1956. Accordingly the provisions of clause 4
(iii) (f) and (g) of the above said order are not applicable to the
company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and nature of its business, for the
purchase of inventory and fixed assets and sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
(v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding Rupees five lacs or more in
respect of each party during the year, have been made at prices which
are reasonable having regard to the prevalent market prices at the
relevant time.
(vi) According to the information and explanations given to us the
company has not accepted deposits covered under the provisions of
section 58A and 58AA or any other relevant provisions of the Companies
Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975. No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion the company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
(ix) a) According to the records of the company, undisputed statutory
dues including provident fund, investor education and protection fund,
employees' state insurance, income tax, sales tax, wealth tax,
service tax, customs duty, excise duty, cess and other material
statutory dues applicable to the company, if any, have been regularly
deposited with appropriate authorities. 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, 2012, for a
period of more than six months from the date they become payable.
b) According to the information and explanations given to us, there are
no disputed statutory dues that have not been deposited on account of
matters pending before the appellate authorities.
(x) The company does not have accumulated losses. The latter part of
the question relating to net worth is thus not applicable to the
company. Further, the company has not incurred cash losses during the
financial year covered under audit and in the immediately preceding
financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks and financial institutions.
(xii) According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of share, debentures and other securities. Therefore,
the provisions of clause 4(xii) of the Companies (Auditor's Report)
Order 2003 are not applicable to the company.
(xiii) The company is not a chit fund or a nidhi mutual benefit
fund/society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor's Report) Order 2003 are not applicable to the
company.
(xiv) According to the information and explanations given to us, the
company has not dealt or traded in share, securities, debentures and
other investments. Therefore, the provisions of clause 4(xiv) of the
Companies (Auditor's Report) Order 2003 are not applicable to the
company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks. Accordingly the provisions of 4(xv) of the Companies (Auditor's
Reports) Order 2003 are not applicable to the company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they 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 report
that no funds raised on short-term basis have been used for long term
investment.
(xviii) According to the information and explanations given to us, the
company has made preferential allotment to the parties and companies
covered in the register maintained under section 301 of the Companies
Act, 1956. The preferential allotments of shares were in accordance
with SEBI (Disclosures and Investor Protection) Guidelines, 2000. The
price at which preferential allotment of shares has been made by
company is not prejudicial to the interest of the company.
(xix) According to the information and explanations given to us, the
company has not issued debentures during the year. Accordingly the
provisions of clause 4(xix) of the Companies (Auditor's Report) Order
2003 are not applicable to the company.
(xx) According to the information and explanations given to us, the
company has not raised money by way of public issue during the year.
Accordingly, the provisions of clause 4(xx) of the above said order are
not applicable to the company. However the money raised by way of
allotment of preferential equity shares has been utilized for the
purpose it was raised.
(xxi) Based upon the audit procedures performed and the information and
explanations given to us, no fraud on or by the company has been
noticed or reported during the year ended 31st March 2012.
For Ashish Agarwal & Co.
Chartered Accountants
Firm Reg. No.010788N
Ludhiana (ASHISH AGARWAL)
May 30, 2012 Partner
M. No. 089579
Mar 31, 2011
1. We have audited the attached balance sheet of M/s Supreme Tex Mart
Limited as at 31st March, 2011, the profit and 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. These 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 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 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the annexure a
statement on the matters specified in paragraph 4 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
e) The Company has received written representations from the directors
as on 31" March, 2011, except from the nominees directors under section
274(1 )(g) of the Companies Act, 1956, which have been taken on record
by the Board of Directors. We have been informed that the nominee
directors are hot required to comply with the requirements of the
aforesaid section 274(1 )(g) of the CompaniesAct, 1956 pursuant to the
relevant notification issued by the Central Government;
We report that none of the director is disqualified as on March 31st,
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the CompaniesAct, 1956.
f) As indicated in Note No. 23 of schedule-17 there is significant
uncertainty associated with the derivative options referred to in the
said note, resolution of which is dependent upon future events which
are not under the direct control of the company, on account of which
the company could not determine the possible loss, if any, on valuation
of open derivative options. The ultimate outcome of these future events
and their affect on the financial statements cannot be ascertained at
this stage.
Subject to above, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts read
together with the significant accounting policies and other notes
thereon give the information required by the CompaniesAct, 1956, in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of balance sheet, of the state of affairs of the company
as at 31 * March, 2011;
ii) in the case of profit and loss account, of the profit for the year
ended on that date; and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditor's Report
(Referred to in paragraph 3)
(i) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) According to the information and explanations given to us, the fixed
assets have been physically verified by the management during the year.
No discrepancies were noticed on such physical verification. In our
opinion, the frequency of physical verification of fixed assets is
reasonable having regard to the size of the company and nature of its
business.
c) According to the information and explanations given to us, the
company has not disposed off substantial part of its fixed assets
during the year.
(ii) a) According to the information and explanations given to us, the
inventories have been physically verified by the management at the
close of the year. In our opinion the frequency of verification is
reasonable.
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 as evidenced by the written procedures and
instructions are reasonable and adequate in relation to the size of the
company and nature of its business.
c) The Company is maintaining proper records of inventory. As explained
to us, no material discrepancies were noticed on physical verification
between physical stocks and book records.
(iii) a) According to the information and explanations given to us, the
company has not granted loans secured or unsecured to companies, firm
or other parties covered in the register maintained under section 301
of the Companies Act, 1956. Accordingly the provisions of clause 4
(iii) (b) (c) and (d) of the above said order are not applicable to the
company. b) According to the information and explanations given to us,
the company has not taken loans secured or unsecured from companies,
firm or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly the provisions of clause 4
(iii) (f) and (g) of the above said order are not applicable to the
company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and nature of its business, for the
purchase of inventory and fixed assets and sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
(v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register maintained under that section. (b) In our opinion and
according to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding Rupees five lacs or more in respect of each party during
the year, have been made at prices which are reasonable having regard
to the prevalent market prices at the relevant time.
(vi) According to the information and explanations given to us the
company has not accepted
deposits covered under the provisions of section 58Aand 58AAor any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules 1975. No order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion the company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items.of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
(ix) a) According to the records of the company, undisputed statutory
dues including provident fund, investor education and protection fund,
employees' state insurance, income tax, sales tax, wealth tax, service
tax, custom duty, excise duty, cess and other material statutory dues
applicable to the company, if any, have been regularly deposited with
appropriate authorities. 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. b) According to the
information and explanations given to us, there are no disputed
statutory dues that have not been deposited on account of matters
pending before the appellate authorities.
(x) The company does not have accumulated losses. The latter part of
the question relating to net worth is thus not applicable to the
company Further, the company has not incurred cash losses during the
financial year covered under audit and in the immediately preceding
financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has
not defaulted in repayment of dues to banks and financial institutions.
(xii) According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities. Therefore,
the provisions of clause 4(xii) of the Companies (Auditor's Report)
Order 2003 are not applicable to the company.
(xiii) The company is not a chit fund or a nidhi mutual benefit
fund/society. Accordingly, the provisions of clause 4
(xiii) of the Companies (Auditor's Report) Order 2003 are not
applicable to the company.
(xiv) According to the information and explanations given to us, the
company has not dealt or traded in share, securities, debentures and
other investments. Therefore, the provisions of clause 4
(xiv) of the Companies (Auditor's Report) Order 2003 are not applicable
to the company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks. Accordingly the provisions of clause 4
(xv) of the Companies (Auditor's Report) Order 2003 are not applicable
to the company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loanshave been applied for the purpose for which
they were obtained.
(xvii) According to information and explanations given to us and on an
overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long term
investment.
(xviii) According to the information and explanations given to us, the
company has made preferential allotment to the parties and companies
covered in the register maintained under section 301 of the Companies
Act, 1956.The preferential allotments of shares were in accordance with
SEBI (Disclosures and Investor Protection) Guidelines, 2000. The price
at which preferential allotments of shares has been made by company is
not prejudicial to the interest of the company.
(xix) According to the information and explanations given to us the
company has not issued debentures during the year. Accordingly the
provisions of clause 4
(xix) of the Companies (Auditor's Report) Order 2003 are not applicable
to the company.
(xx) According to the information and explanations given to us, the
company has not raised money
by way of public issue during the year. Accordingly, the provisions of
clause 4(xx) of the above said order are not applicable to the company.
However the money raised by way of allotment of preferential equity
shares has been utilized for the purpose it was raised.
(xxi) Based upon the audit procedures performed and the information and
explanations given to us,
no fraud on or by the company has been noticed or reported during the
year ended 31" March 2011
FOR S.C. VASUDEVA & CO.
CHARTERED ACCOUNTANTS
FIRMREGN.NO.000235N
PLACE :LUDHIANA (SANJAY MOHAN)
DATED: 27.05.2011 Partner
M. No. 86066
Mar 31, 2010
1. We have audited the attached balance sheet of M/s Supreme Tex Mart
Limited as at 31st March, 2010, the profit and 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 ouraudit in accordance with auditing standards
generally accepted in India. These stand- ards 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 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 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the annexure a
statement on the matters specified in paragraph 4 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
e) The Company has received written representations from the directors
on 31st March, 2010, except from the nominees directors under section
274(1)(g) of the Companies Act, 1956, which have been taken on record
by the Board of Directors. We have been informed that the nominee
directors are not required to comply with the requirements of the
aforesaid section 274(1 )(g}of the Companies Act, 1956 pursuant to the
relevant notification issued by the Central Government;
We report that none of the director is disqualified as on March 31st,
2010 from being appointed as a director in terms of clause (g) of
sub-section (I) of Section 274 of the. Companies Act, 1956.
f) As indicated in note-20 in schedule-17 there is significant
uncertainty associated with the derivative options referred to in the
said note, resolution of which is dependent upon future events which
are not under the direct control of the Company, on account of which
the Company could not determine the possible loss, if any, on valuation
of open derivative options. The ultimate outcome of these future events
and their affect on the Financial Statements cannot be ascertained at
this stage.
Subject to above, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts read
together with the significant accounting policies and other notes
thereon 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: i) in the case
of balance sheet, of the state of affairs of the company as at 31 st
March, 2010; ii) in the case of profit and loss account, of the loss
for the year ended on that date; and iii) in the case of cash flow
statement, of the cash flows for the year ended on that date.
Annexure to the Auditors Report (Referred to in paragraph 3)
(i) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) According to the information and explanations given to us, the fixed
assets have been physically verified by the management during the year.
No discrepancies were noticed on such physical verification. In our
opinion, the frequency of physical verification of fixed assets is
reasonable having regard to the size of the company and nature of its
business.
c) According to the information and explanations given to us, the
company has not disposed off substantial part of its fixed assets
during the year.
(ii) a) According to the information and explanations given to us, the
inventories have been physically verified by the management at the
close of the year. In our opinion the frequency of verification is
reasonable.
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 as evidenced by the written procedures and
instructions are reasonable and adequate in relation to the size of the
company and nature of its business.
c) The Company is maintaining proper records of inventory. As explained
to us, no material discrepancies were noticed on physical verification
between physical stocks and book records.
(iii) a) According to the information and explanations given to us, a
company has not granted loans secured or unsecured to companies, firms
or other parties covered in the register maintained under section 301
of the Companies Act, 1956. Accordingly the provisions of clause 4
(iii) (b) (c) and (d) of the Companies (Auditors Report) Order 2003
are not applicable to the company.
b) The company has taken unsecured loans from three parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The amount involved in the transactions is Rs. 1533.31 lacs. The amount
payable is RS.3022.51 lacs to these parties as at the close of the
year.
c) According to the information and explanations given to us, these are
interest free loans and the other terms and conditions in respect of
unsecured loans taken by the Company, are not prima-facie prejudicial
to the interest of the company;
d) In our opinion and according to the information and explanations
given to us, the payment of principal amount and interest in respect of
the aforesaid loans is regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and nature of its business, for the
purchase of inventory and fixed assets and sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
(v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956. have been entered in the
register maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding Rupees five lacs or more in
respect of each party during the year, have been made at prices which
are reasonable having regard to the prevalent market prices at the
relevant time.
(vi) According to the information and explanations given to us the
company has not accepted deposits covered % under the provisions of
section 58Aand 58AAorany other relevant provisions of the Companies
Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975. No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion the company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
(ix) a) According to the records of the company, undisputed statutory
dues including provident fund, investor education and protection fund,
employees state insurance, income tax, sales tax, wealth tax, service
tax, custom duty, excise duty, cess and other material statutory dues
applicable to the company, if any, have been regularly deposited with
appropriate authorities. 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, there are
no disputed statutory dues that have not been deposited on account of
matters pending before the appellate authorities.
(x) The company does not have accumulated losses. The latter part of
the question relating to net worth is thus not applicable to the
company. Further, the company has not incurred cash losses during the
financial year covered under audit and in the immediately preceding
financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks and financial institutions.
(xii) According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities. Therefore,
the provisions of clause 4(xii) of the Companies (Auditors Report)
Order 2003 are not applicable to the company.
(xiii) The company is not a chit fund or a nidhi mutual benefit
fund/society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditors Report) Order2003 are not applicable to the
company.
(xiv) According to the information and explanations given to us, the
company has not dealt or traded in share, securities, debentures and
other investments. Therefore, the provisions of clause 4(xiv) of the
Companies (Auditors Report) Order 2003 are not applicable to the
company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks. Accordingly the provisions of clause 4 (xv) of the Companies
(Auditors Report) Order 2003 are not applicable to the company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were obtained.
(xvii) According to information and explanations given to us and on an
overall examination of the balancesheet of the company, we report that
no funds raised on short-term basis have been used for long term
investment.
(xviii) According to the information and explanations given to us, the
company has not made any 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) According to the information and explanations given to us the
company has not issued debentures during the year. Accordingly the
provisions of clause 4 (xix) of the Companies (Auditors Report) Order
2003 are not applicable to the company.
(xx) According to the information and explanations given to us, the
company has not raised any money by way of public issue during the
year. Accordingly the provisions of clause 4 (xx) of the Companies
(Auditors Report) Order 2003 are not applicable to the company.
(xi) Based upon the audit procedures performed and the information and
explanations given to us, no fraud on or by the company has been
noticed or reported during the year ended 31 st March 2010.
FOR S.C. VASUDEVA & CO.
Chartered Accountants
(SANJIV MOHAN)
PLACE : LUDHIANA Partner
DATED: 21.05.2010 M. No. 86066
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