Mar 31, 2015
Report on the Financial Statements
We have audited the accompanying financial statements of Swadeshi
Polytex Limited (''the Company'') which comprise the Balance Sheet as at
31st March 2015, the Statement of Profit & Loss and the Cash Flow
Statement for the year then ended and Notes to Financial Statements
comprising of a summary of significant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the 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. An audit also includes evaluating the
appropriateness of the 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 financial
statements
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at 31st March 2015 and its Profit and its 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, 2015 (''the
Order'') issued by the Central Government of India in terms of
sub-section (11) of section 143 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.
2. As required by section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations,
which to the 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 appears from our examination of those
books;
c) The Balance Sheet, the Statement of Profit & Loss and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of written representation received from the directors
as on 31st March, 2015 taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on 31st March,
2015 from being appointed as a Director in terms of Section 164(2) of
the Act ; and
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 - Refer Note 2.22.1 to
the financial statements;
ii. We are explained that the Company did not have any long term
contracts including derivative contracts for which there were any
material foreseeable losses.
iii. We are explained that there were no amounts which were required to
be transferred to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditors'' Report
Referred to in Paragraph 1 under the heading "Report on Other Legal and
Regulatory Requirements" of our Report to the members of Swadeshi
Polytex Limited for the year ended 31st March 2015. We report that:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details
and situation of fixed assets.
(b) We are explained that the management has carried out the year end
physical verification of majority of fixed assets. In our opinion, the
frequency of the physical verification is reasonable having regard to
the size and nature of operations of the company. We are explained that
no material discrepancies were noticed on such physical verification.
(ii) (a) The only inventory in hand is in the form of lease hold plot
rights, for which management has conducted
physical verification in the form of measurement, frequency of which in
our opinion is reasonable;
(b) In our opinion and in view of nature of inventory, the action taken
and procedures followed by the management for physical verification of
inventory were found reasonable and adequate.
(c) In our opinion, the company has identified and maintained proper
records in respect of various plots of land and no material
discrepancies were noticed on the physical verification of the same as
compared to book records.
(iii) (a) The Company has granted loan to a party covered in the
register maintained under Section 189 of the
Companies Act, 2013 ("the Act").
(b) In the case of loan granted to the party listed in the register
maintained under Section 189 of the Act, the borrower has been regular
in the payment of interest as stipulated. We are explained that as per
the terms of arrangement, the repayment of principal is yet to
commence. Hence Clause iii (b) of the Order is not applicable in
respect of repayment of the principal amount.
(iv) In our opinion and according to the information and explanations
give to us, there are adequate internal control systems commensurate
with the size of the company and nature of its business with regard to
purchase of fixed assets and trading activities. Further, on the basis
of our examination and according to the information and explanations
given to us, we have neither come across nor have been informed of any
instance of major weakness in the aforesaid internal control
procedures.
(v) During the year under report, the company has not accepted any
deposit from the public to which provisions of sections 73 to 76 of the
Act and relevant rules framed there under apply.
(vi) We are informed that the maintenance of the cost records has not
been prescribed by the Central Government u/s 148(1) of the Act for the
company since no manufacturing activities were carried out by it during
the year under report.
(vii) (a) According to the information and explanation given to us and
on the basis of our examination of the books of account, the company
has been regular in depositing the undisputed statutory dues including
Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, value added tax,
cess and any other material statutory dues applicable to it with the
appropriate authorities.
(b) According to information and explanation given to us and on the
basis of our examination of the books of accounts of the company,
following are the details of sales tax/income tax/custom duty/wealth
tax/ service Tax/excise duty/cess, which have not been deposited on
account of any dispute.
Name of Nature of Amount Period Forum at which
Statute Dues (in lacs) dispute is
pending
Various Sales Tax 149.37 Various Various Forum
Sales Tax
Acts
The Central Excise Duty 165.22 Various CESAT & the
Excise Supreme Court
Act, 1944
The Central Penalty on 25.00 2012 CESAT Excise
Excise Duty
Act, 1944
The Customs Custom Duty 8.50 Various D. C. Customs
Act, 1962 Mumbai
(c) According to information and explanation given to us, there were no
amounts required to be transferred to the investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 and rules made there under.
viii) At the end of the current financial year, company''s accumulated
losses were more than 50% of its net worth. Further, the company has
not incurred cash losses during the current financial year as well as
in the immediately preceding financial year.
ix) According to the information and explanation given to us, we are
informed that the company had not borrowed any money from any bank or
financial institution and had not issued debentures during the year
under report.
x) According to the information and explanation given to us by the
Management, the Company had not given any guarantee for loans taken by
others from banks or financial institutions.
xi) We are informed that the Company had not obtained any term loans
during the current financial year.
xii) During the course of our examination of the books and records of
the company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company, noticed and reported during the year,
nor have we been informed of such case by the Management.
For SANMARKS & ASSOCIATES
Chartered Accountants
Firm''s Regn. No. 003343N
Sd/-
Place: Faridabad S. K. BANSAL
Date: 27th May, 2015 Partner
Membership No.: 082242
Mar 31, 2014
We have audited the accompanying financial statements of Swadeshi
Polytex Limited (Âthe Company'') which comprise the Balance Sheet as
at 31st March 2014, the Statement of Profit & Loss and the Cash Flow
Statement for the year then ended and Notes to Financial Statements
comprising of 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 (Âthe Act''). This responsibility includes
the design, implementation and maintenance of internal controls
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatements, 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 the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgement including the assessment of
the risk of the material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and 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 aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principals
generally accepted in India :
a) in the case of balance sheet, of the state of affairs of the Company
as at 31st March 2014,
b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (Âthe
Order'') issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by section 227 (3) of the Act, we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the 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 appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit & Loss 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 (which continues to be applicable in respect of
section 133 of the Companies Act, 2013 in terms of general circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs).
e) On the basis of written representation received from the directors
as on 31st March, 2014 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31st 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
Referred to in Paragraph 1 under the heading "Report on Other Legal and
Regulatory Requirements" of our
Report to the members of Swadeshi Polytex Limited for the year ended
31st March, 2014. We report that:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) We are explained that the Company has carried out the year end
physical verification of majority of fixed assets. In our opinion, the
frequency of the physical verification is reasonable having regard to
the size and nature of operations of the company. We are explained that
no material discrepancies were noticed on such physical verification.
(c) The Company has not sold any part of fixed assets during the year,
therefore the provision of the clause (i)(c) is not applicable.
(ii) (a) The only inventory in hand at the year end is in the form of
lease hold plot rights, for which management has conducted physical
verification in the form of measurement, frequency of which in our
opinion is reasonable;
(b) In our opinion and in view of nature of inventory, the action taken
and procedures followed by the management for physical verification of
inventory were found reasonable and adequate.
(c) In respect of the trading activities, the company has identified
and maintained records in respect of various plots of land and no
material discrepancies were noticed on the physical verification of the
same as compared to book records.
(iii) (a) We are explained that the Company has not granted any loans
secured or unsecured to any Company, firm or other party required to be
listed in the register maintained under Section 301 of the Companies
Act 1956.
In view of clause (iii) (a) above, the clauses (iii)(b), (iii)(c) and
(iii)(d) of the Order are not applicable.
(e) The company had taken secured loan from a body corporate and
unsecured loan from another body corporate listed in the register
maintained under Section 301 of the Companies Act 1956. The maximum
amount involved for the said loans was Rs. 2495.30 lac for Secured Loan
and Rs. 230.21 Lac for unsecured loans.
(f) In our opinion, the rate of interest and other terms and conditions
of the aforesaid loans taken by the company, considering various
factors, are prima facie not prejudicial to the interest of the
company;
(g) In respect of the aforesaid secured loan, in our opinion the
interest of Rs. 127.18 lac is overdue for payment. In respect of
unsecured loan, it is informed that the same is repayable on demand. We
are also informed that no such demand was raised for repayment of
aforesaid unsecured loan during the year and therefore there was no
overdue amount at the year end.
(iv) In our opinion and according to the information and explanations
give to us, there are adequate internal control systems commensurate
with the size of the company and nature of its business with regard to
purchase of fixed assets and Trading activities. Further, on the basis
of our examination and according to the information and explanations
given to us, we have neither came across nor have been informed of any
instance of major weakness in the aforesaid internal control
procedures.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered into the register maintained under Section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the company has not entered into any transactions
exceeding the aggregate amount of Rs. five lacs in respect of aforesaid
parties during the year except the transactions under loan and interest
thereon and reimbursement accounts.
(vi) The company has not, during the year, accepted any fixed deposit
from the public to which provisions of section 58A & 58AA of the
Companies Act, 1956 and relevant rules framed there under apply.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We are informed that the maintenance of the cost records has not
been prescribed u/s 209 (1) (d) of the Companies Act 1956 for the
company since no manufacturing activities were carried out by the
company during the year under report.
(ix) (a) According to the information and explanation given to us and
on the basis of our examination of the books of account, the company
has been generally regular in depositing the 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 any other material statutory
dues applicable to it with the appropriate authorities.
(b) According to information and explanation given to us and on the
basis of our examination of the books of accounts of the company,
following are the details of sales tax/income tax/custom duty/wealth
tax/ service Tax/excise duty/cess, which have not been deposited on
account of any dispute.
Name of Statute Nature of Dues Amount Period Forum at
(in lacs) which
dispute
is
pending
Various Sales Sales Tax 149.37 Various Various
Tax Acts Demand Years Forum
The Central Excise Duty on 165.22 Various Commissioner
Excise Act, unauthorised Years Central
1944 removal of Excise and
goods CESAT
The Central Penalty on 25.00 2012 CESAT
Excise Act, Excise Duty
1944
The Central Custom Duty 0.19 Old D.C.Customs
Excise Act, 1944 Mumbai
(x) At the end of the current financial year, company''s accumulated
losses were more than 50% of its net worth. Further, the company had
not incurred cash loss during the current financial year. However, such
loss was incurred in the immediately preceding financial year.
(xi) According to the information and explanation given to us, we are
informed that the company had not borrowed any money from any bank or
financial institution and had not issued debentures during the year
under report.
(xii) We are informed that the company had not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to it.
(xiv) On the basis of examination of books of accounts and according to
information and explanations given to us, the company is not dealing or
trading in shares, securities, debentures and other Investments.
(xv) According to the information and explanation given to us by the
Management, the Company had not given any guarantee for loans taken by
others from banks or financial institutions.
(xvi) We are informed that the Company had not obtained any term loans
during the current financial year.
(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 the company had not used the short term funds for long term
investment during the year under report.
(xviii) According to the information and explanation given to us, the
company had not made any preferential allotment of shares to parties or
companies covered in register maintained under Section 301 of the Act.
(xix) The company had not issued any debentures, consequently the
provisions of clause 4(xix) of the Order are not applicable to it.
(xx) The company had not raised any money by means of public issue.
(xxi) During the course of our examination of the books and records of
the company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company, noticed and reported during the year,
nor have we been informed of such case by the Management.
For SANMARKS & ASSOCIATES
Chartered Accountants
Firm''s Regn. No. 003343N
Sd/-
Place: Faridabad S. K. BANSAL
Date : 29th April, 2014 Partner
Camp: Ghaziabad Membership No.: 082242
Mar 31, 2012
1. We have audited the attached Balance Sheet of Swadeshi Polytex
Limited as at 31st March 2012, the State- ment of Profit & Loss and
also the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
CompanyÃs management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial state- ments are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Govern- ment in terms of Section 227(4A)
of the Companies Act, 1956, we give our comments in the annexure on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Statement of Profit & Loss 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.
(v) On the basis of written representation received from the Directors
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31st March,
2012 from being appointed as a Director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(vi) A) without qualifying our opinion, we draw attention to Note
B-2.29 regarding provision of interest in
pursuance of Full time Settlement reached with secured lenders, which
is pending independent confirmation by the respective lenders.
B) Attention is invited to Note No. B-2.27 in relation to pending
confirmation for certain inoperative Bank Accounts, Trade receivables &
Payables, loans and advances. The impact of reconciliation and
adjustment of the same, if any, on the financial statements is
unascertained.
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts subject to our comments in
para 4(vi) (B) above and read together with the Other Notes attached
thereto give the information required by Companies Act, 1956, in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(b) In the case of the Statement of Profit and Loss, of the Loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of our report of even date to the
members of Swadeshi Polytex Limited on the accounts for the year ended
31" March, 2012.)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and
situation of fixed assets.
(b) The Company has carried out the year end physical verification of
majority of fixed assets. In our opinion, the frequency of the physical
verification is reasonable having regard to the size and nature of
operations of the company.
(c) The Company in accordance with an agreement has disposed off the
substantial part of its Building and Plant & Machinery kept under the
head ÃAssets held for disposalÃ. Further, the company has commenced
the new business of dealing in real estate by converting its factory
land into tradable stock in trade. In view of the ongoing trading
activities and the intention of the company to continue the business in
the future, we are of the opinion that the going concern assumption
will not be affected due to the disposal of the aforesaid Buildings and
Plant & Machinery.
(ii) (a) The only inventory in hand at the year end is in the form of
lease hold plot rights, for which management
has conducted physical verification in the form of measurement,
frequency of which in our opinion is reasonable;
(b) In our opinion and in view of nature of inventory, the action taken
and procedures followed by the management for physical verification of
inventory were reasonable and adequate.
(c) In respect of the trading activity of real estate, the company has
identified and maintained records in respect of various plots of land
and no material discrepancies were noticed on the physical verification
of the same.
(iii) (a) We are explained that the Company has not granted any loans
secured or unsecured to any Company,
firm or other party required to be listed in the register maintained
under Section 301 of the Companies Act 1956.
In view of clause (iii) (a) above, the clauses (iii)(b), (iii)(c) and
(iii)(d) are not applicable.
(e) The company had taken secured loan from a body corporate and
unsecured loans from another body corporate listed in the register
maintained under Section 301 of the Companies Act 1956. The maximum
amount involved for the said loans was Rs. 2451.49 lacs for Secured
Loan and Rs. 230.21 Lacs for unsecured loans.
(f) In our opinion, the terms and conditions of the aforesaid loans
taken by the company are prima facie not prejudicial to the interest of
the company;
(g) In respect of the aforesaid secured loan, we are explained that the
company has reached a full time settlement in respect of all dues upto
a cut off date during the year. As at the year end, there was no
overdue amount pending for repayment. In respect of unsecured loan, it
is informed that the same is repayable on demand. We are also informed
that no such demand was raised for repayment of aforesaid loan during
the year and therefore there was no overdue amount at the year end.
(iv) In our opinion and according to the information and explanations
give to us, there are adequate internal control systems commensurate
with the size of the company and nature of its business with regard to
purchase of fixed assets and Trading activities. Further, on the basis
of our examination and according to the information and explanations
given to us, we have neither came across nor have been informed of any
instance of major weakness in the aforesaid internal control
procedures.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts
or arrangements that need to be entered into the register maintained
under Section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the company has not entered into any transactions
exceeding the aggregate amount of Rs. five lacs in respect of aforesaid
parties during the year except the transactions under loan and interest
thereon and reimbursement accounts.
(vi) The company has not, during the year, accepted any fixed deposit
from the public to which provisions of section 58A & 58AA of the
Companies Act, 1956 and relevant rules framed there under apply.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We are informed that the maintenance of the cost records has not
been prescribed u/s 209 (1) (d) of the Companies Act 1956 for the
company since no manufacturing activities were carried out by the
company during the year under report.
(ix) (a) According to the information and explanation given to us and
on the basis of our examination of the
books of account, the company has been generally regular in depositing
the undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employeesà State Insurance, Income-
tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess
and any other material statutory dues applicable to it with the
appropriate authorities except TDS on Interest of Rs. 5,93,517,
remaining outstanding for more than six months as at 31st March, 2012
from the date it was payable.
(b) According to information and explanation given to us and on the
basis of our examination of the books of accounts of the company,
following are the details of sales tax/income tax/custom duty/wealth
tax/service Tax/excise duty/cess, which have not been deposited on
account of any dispute.
Name of
Statute Nature of
Dues Amount Period Forum at which
(in lacs) dispute is
pending
Various Sales
Tax Sales Tax 133.86 Various Various Forum
Acts Demand Years
The Central Excise Excise
Duty on unauth- 165.22 Various Commissioner
Central
Act, 1944 orised removal
of goods Years Excise and
CESAT
The Central
Excise Penalty on Excise 25.00 2012 CESAT
Act, 1944 Duty.
The Central
Excise Custom Duty 0.19 Old D. C.
Customs
Act, 1944 Mumbai
(x) At the end of the current financial year, CompanyÃs accumulated
losses were more than 50% of its net worth.
The company had incurred cash loss during the current financial year as
well as in the immediately pre- ceding financial year.
(xi) According to the information and explanation given to us, we are
informed that the company had not borrowed any money from any bank or
financial institution and had not issued debentures during the year
unde report.
(xii) We are informed that the Company had not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provi- sions of clause 4(xiii) of
the Companies (AuditorÃs report) Order, 2003 (as amended) are not
applicable to it.
(xiv) On the basis of examination of books of accounts and according to
information and explanations given to us, the Company is not dealing or
trading in shares, securities, debentures and other Investments.
(xv) According to the information and explanation given to us by the
Management, the Company had not given any guarantee for loans taken by
others from banks or financial institutions.
(xvi) We are informed that the Company had not obtained any term loans
during the current financial year.
(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 the Company had not used the short term funds for long term
investment during the year under report.
(xviii) According to the information and explanation given to us, the
Company had not made any preferential allotment of shares to parties or
Companies covered in register maintained under Section 301 of the Act.
(xix) The company had not issued any debentures, consequently the
provisions of clause 4(xix) of the Compa- nies (AuditorÃs Report)
Order, 2003 (as amended) are not applicable to it.
(xx) The Company had not raised any money by means of public issue.
(xxi) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company, noticed and reported during the year,
nor have we been informed of such case by the Management.
For Suresh Bansal & Co.
Chartered Accountants
Firm's Regn. No. 003343N
S. K. Bansal Partner
(Membership No. : 082242)
Place : Faridabad
Date : 21st May, 2012
Camp : Ghaziabad
Mar 31, 2010
1. We have audited the attached Balance She et of Swadeshi Polytex
Limited as at 31st March 2010, the Profit and Loss Account and also the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government in terms of Section 227(4A)
of the Companies Act, 1956, we give our comments in the annexure on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit & Loss Account and 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.
(v) On the basis of written representation received from the directors
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31 st March,
2010 from being appointed as a Director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(vi) We have relied upon the management representation in respect of
the following matters in view of the pending availability verification
of relevant documents and records.
a) Balance confirmation in respect of certain inoperative Bank
Accounts, debtors, creditors, loan and other parties (Refer note no. B-
7 of Schedule 11)
b) Status of assessment/cases relating to Income tax, Sales Tax, Excise
Duty, custom duty and other matters (Refer note no B-1 of Schedule 11)
c) Sundry debtors outstanding for long being considered good and not
provided for (Amount Rs. 450.49 lacs previous year Rs.450.49 Lacs,
being net of provision already made of Rs. 36.93 Lacs)
d) Recognition of value of assets and liabilities in view of the
discontinued operations (Refer note No B- 3 of Schedule 11)
e) Provisions of interest on secured loans taken from bodies corporate.
(Refer note No B-8 of Schedule 11)
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts subject to our comments in
para 4(vi) above, impact on Balance Sheet and Profit & Loss Account for
the year ended 31s March 2010, amount unascertained, read together
with the Notes to Accounts given in Schedule 11 give the information
required by Companies Act, 1956, in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(b) In the case of the Profit and Loss Account, of the Loss for the
year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of our report of even date to the
members of Swadeshi Polytex Limited on the accounts for the year ended
31st March, 2010.)
(i) (a) The Company has maintained records showing full particulars
including quantitative details and situation of fixed assets bur the
same are pending for updation.
(b) We have been explained that the management had taken the stock of
the status of various fixed assets after taking over the possession of
the Plant in the preceding years and based on the assessment and
technical evaluation by an independent agency has scrapped off the
Plant & Machinery under the head Plant & machinery held for disposal.
The reconciliation between the physical and book records in respect of
the other assets is pending. Hence discrepancies, if any, between the
physical and book records will be ascertained and adjusted in the books
of accounts on the finalization of the aforesaid reconciliation.
(c) During the year the Company has disposed off part of the scrapped
Plant & Machinery kept under the head Plant & Machinery held for
disposal as stated above. Further, as informed, the company is
continuously trying to explore other avenues of business activity and
has also carried out some trading activity during the year. In view of
the informed intention of the company to continue the business in the
future, we are of the opinion that the going concern assumption will
not be affected due to the disposal of the aforesaid Plant & Machinery.
(ii) (a) After taking the possession, the management has engaged an
external agency to carry out the physical verification and technical
evaluation of the entire inventory held for disposal. In our opinion
considering the nature of Inventory such verification frequency is
reasonable;
(b) In our opinion, the action taken and procedures followed by the
management for physical verification of inventory were generally
reasonable and adequate.
(c) The company is only carrying the scrapped inventory for disposal
and the records were not maintained in respect of the said inventory.
In the absence of such records, the question of adjustment of
difference of book balance with physical balance does not arise.
(iii) (a) We are explained that the Company has not granted any loans
secured or unsecured to any Company, firm or other party required to be
listed in the register maintained under Section 301 of the Companies
Act 1956.
In view of clause (iii) (a) above, the clauses (iii)(b), (iii)(c) and
(iii)(d) are not applicable. (e) The company had taken secured loan
from a body corporate and unsecured loans from two body corporate
listed in the register maintained under Section 301 of the Companies
Act 1956. The maximum amount involved and the year end balance of the
said loans was Rs. 1350 lacs for Secured Loan and Rs. 522.98 Lacs for
unsecured loans.
(f) In our opinion, the terms and conditions of the aforesaid loans
taken by the company are prima facie not prejudicial to the interest of
the company;
(g) We are explained that the above loans are repayable on demand. We
are informed that no such demand was raised for repayment of aforesaid
loan during the year and therefore we are unable to comment upon the
regularity of payment or otherwise of the balance amount.
(iv) In our opinion, given the nature, size and scale of the activity
carried out by the company during the year, there is adequate internal
control system with respect to Trading activities and disposal of
Scrapped Plant & Inventory. Further, on the basis of our examination
and according to the information and explanations given to us, we have
neither came across nor have been informed of any instance of major
weakness in the aforesaid internal control procedures.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered into the register maintained under Section 301
of the Companies Act, 1956 have been so entered. (b) In our opinion
and according to the information and explanations given to us company
has not entered into any transactions exceeding the aggregate amount of
Rs. five lacs in respect of aforesaid parties during the year except
the transactions under loan and reimbursement accounts. Accordingly
this clause has not been commented upon.
(vi) In view of the fact that during the year no new deposits are
received by the Company from the public and the unpaid matured public
deposits with interest aggregating to Rs 4.63 lacs have been deposited
with the Investor Education and Protection Fund,, we are of the opinion
that there are no pending deposits for which company has to comply with
the provisions of section 58A and 58AA of the Companies Act, 1956 and
relevant rules framed there under. Further, we have been explained
that no order has been passed by the Company Law Board or the National
Company Law Tribunal or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We are informed that the Company had not maintained the cost
accounting records as required u/s 209 (1) (d) of the Companies Act
1956 since no manufacturing activities were carried out by the company
during the year under report.
(ix) (a) According to the information and explanation given to us and
on the basis of our examination of the books of account, the company
has been generally regular in depositing the 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 any other material statutory
dues applicable to it with the appropriate authorities excepf TDS on
Interest ofRs. 4,56,417 remaining outstanding for more than six months
as at 31s1 March 2010. (b) The details of sales tax/income tax/custom
duty/wealth tax/service Tax/excise duty/cess, which have not been
deposited on account of dispute are given hereunder, to the extent
available with the company:
Name of Nature of Amount Period Forum at
Statute Dues (in lacs) which dispute
is pending
Various Sales Sales Tax 133.74 Various Years Various Forum
Tax Acts Demand
The Central Excise Duty on 165.22 Various Years Commissioner
Excise Act, unauthorised Central Excise
1944 removal of goods
(x> At the end of the current financial year, companys accumulated
losses were more than 50% of its net worth. The company had incurred
cash losses during the current financial year as well as in the
immediately preceding financial year.
(xi) According to the information and explanation given to us, we are
explained that the company had not borrowed any money from any Bank or
any Financial Institution and had not issued debentures during the year
under report
(xii) We are informed that the company had not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors report) Order, 2003 (as amended) are not
applicable to it.
(xiv) On the basis of examination of books of accounts and according to
information and explanations given to us, the company is not dealing or
trading in shares, securities, debentures and other Investments.
(xv) According to the information and explanation given to us by the
Management, the Company had not given any guarantee for loans taken by
others from banks or financial institutions.
(xvi) We are informed that the Company had not obtained any term loans
during the current financial year.
(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 the company had not raised any funds on short-term basis.
(xviii) According to the information and explanation given to us, the
company had not made any preferential allotment of shares to parties or
companies covered in register maintained under Section 301 of the Act.
(xix) The company had not issued any debentures, consequently the
provisions of clause 4(xix) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to it.
(xx) The company had not raised any money by means of public issue.
(xxi) During the course of our examination of the books and records of
the company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company, noticed and reported during the year,
nor have we been informed of such case by the Management.
For Suresh Bansal & Co.
Chartered Accountants
Firms Regn. No. 003343N
Sd/-
Place : Faridabad S. K. BANSAL
Date : 9th August, 2010 Partner
Camp: Ghaziabad Membership No. 82242