Mar 31, 2018
REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying Ind AS financial statements of Gini Silk Mills Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013(âthe Actâ) with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. 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.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these financial statements based on our audit.
4. 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.
5. 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.
6. 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 auditors'' 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.
7. 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
8. 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 March 31, 2018, and its profit including other comprehensive income, its cash flows and changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. 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 (hereinafter referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
10. 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standard specified under Section 133of the Act;
e) on the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 âAnnexure Bâ; and
g) with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. the Company has disclosed the impact of pending litigations as at March 31, 2018 on its financial position in its financial statements to the extent determinable/ascertainable. - Refer Note 38 to the financial statements;
ii. t he Company does not have any long term contract including derivative contracts for which there are any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.
Referred to in paragraph 9 of the Independent Auditors'' Report of even date to the members of Gini Silk Mills Limited on the financial statements for the year ended March 31, 2018.
i (a) The Company has maintained proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.
(c ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, as disclosed in Note 2 on fixed assets to the financial statements, are held in the name of the Company.
ii The inventory excluding stocks with third parties has been physically verified by the management at regular intervals, which we consider to be reasonable. No material discrepancies were noticed on physical verification of inventories as compared to book records.
iii According to information and explanation given to us, the Company''s has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership firm or other parties, covered in the register maintained under section 189 of the Companies Act 2013 and hence sub clause (a), (b) and (c) are not applicable.
iv In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made.
v The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi According to the information and explanation given to us the rules made by the Central Government of India, the Company is not required to maintain cost records as specified under sub section (1) of section 148 of the Companies Act 2013 in respect of its products. Accordingly, provision of Clause 3(vi) of the Order is not applicable.
vii (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues applicable to it as per the available records as far as ascertained by us on our verification.
According to the information and explanations given to us, there were no undisputed amounts payable in respect of outstanding statutory dues as aforesaid as at 31st March 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax, Income tax, sales tax, service tax, duty of custom, value added tax and service tax as at March 31, 2018 which have not been deposited on account of any dispute and the particulars of Excise duty and Cess as at March 31, 2018 which have not been deposited with the appropriate authorities on account of dispute are as under:
Name of the Statute |
Nature of Dues / Period to which the amount relates |
Amount (INR) |
Forum where dispute is pending |
Textile Committee Act &Cess Rules 1975 |
Cess (Various years from 1998 to 2008) |
7,09,232/- |
Textile Committee Cess Appellate Tribunal |
Central Excise Act |
Demand on differential amount of excise duty. (16/12/1998 to 28/02/2001) |
1,85,09,688/- |
Supreme Court of India |
Central Excise Act |
Demand against availment of cenvat credit. (Various years) |
4,35,642/- |
Custom, Excise and Service Tax Appellate Tribunal |
Total |
19,654,562/- |
viii According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues of loans taken from banks. The Company did not have any outstanding dues in respect of financial institution, government or debenture holders during the year.
ix The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.
x During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to information and explanation given to us, we have neither come across any instance of fraud on or by the Company, its officers or employees, noticed or reported during the period, nor have we been informed of such case by the management..
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 for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii In our opinion and according the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, provision of Clause 3(xii) of the Order is not applicable.
xiii According to the information and explanation given to us and based on our verification of the records of the Company and on the basis of review and approval by the Board and Audit Committee, the transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable 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 explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review. Accordingly, the provision of Clause 3(xiv) of the Order is not applicable.
xv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them. Accordingly, the provision of Clause 3(xv) of the Order is not applicable.
xvi The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Referred to in paragraph 10(f) of the Independent Auditorsâ Report of even date to the members of Gini Silk Mills Limited on the financial statements for the year ended March 31, 2018. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013
1. We have audited the internal financial controls over financial reporting of Gini Silk Mills Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial
Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that
i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. I n our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Billimoria Mehta & Co.
Chartered Accountants
Firm Registration Number: 101490W
CA Prakash Mehta
Partner
Membership Number:030382
Mumbai, May 28, 2018
Mar 31, 2016
TO THE MEMBERS OF GINI SILK MILLS LIMITED
REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of Gini Silk Mills Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements to 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.
Auditors Responsibility
3. Our responsibility is to express an opinion on these financial statements based on our audit.
4. 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.
5. 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.
6. 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 auditorsâ 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 Companyâs 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 Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
7. 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
8. 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 March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditorâs Report) Order, 20161, issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order
10. 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 Statement of Profit and 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 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 âAnnexure Bâ; and
g) with respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. the Company has disclosed the impact of pending litigations as at March 31, 2016 on its financial position in its financial statements to the extent determinable/ascertainable. - Refer Note 28 to the financial statements;
ii. the Company does not have any long term contract including derivative contracts for which there are any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016.
(b) According to the information and explanations given to us, dues in respect of Income tax, Excise duty and Cess that have not been deposited with the appropriate authorities on account of dispute are as under:
Name of the Statute |
Nature of Dues / Period to which the amount relates |
Amount (INR) |
Forum where dispute is pending |
Excise Service Tax |
Demand for Deemed Credit (February 2001 to October 2002) |
3,38,418/- |
Customs Excise and service Tax Appellate Tribunal |
Textile Committee Act & Cess Rules 1975 |
Cess (Various years from 1998 to 2008) |
7,09,232/- |
Textile Committee Cess Appellate Tribunal |
Central Excise Act |
Demand on differential amount of excise duty. (16/12/1998 to 28/02/2001) |
1,85,09,688/- |
Supreme Court of India |
Central Excise Act |
Demand against availment of cenvat credit. (Various years) |
56,78,046/- |
Custom, Excise and Service Tax Appellate Tribunal |
Income Tax Act |
Demand for A.Y. 2012-2013 |
14,51,720/- |
Departmental Authorities |
Total |
2,66,87,104/- |
ANNEXURE A TO INDEPENDENT AUDITORSEREPORT Referred to in paragraph 9 of the Independent Auditors Report of even date to the members of Gini Silk Mills Limited
on the financial statements for the year ended March 31, 2016.
i (a) The Company has maintained proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.
(c ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, as disclosed in Note 11 on fixed assets to the financial statements, are held in the name of the Company.
ii The inventory excluding stocks with third parties has been physically verified by the management at regular intervals, which we consider to be reasonable. No material discrepancies were noticed on physical verification of inventories as compared to book records.
iii According to information and explanation given to us, the Companyâs has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership firm or other parties, covered in the register maintained under section 189 of the Companies Act 2013 and hence sub clause (a), (b) and (c) are not applicable.
iv In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made.
v The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi According to the information and explanation given to us the rules made by the Central Government of India, the Company is not required to maintain cost records as specified under sub section (1) of section 148 of the Companies Act 2013 in respect of its products. Accordingly, provision of Clause 3(vi) of the Order is not applicable.
vii (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues applicable to it as per the available records as far as ascertained by us on our verification.
According to the information and explanations given to us, there were no undisputed amounts payable in respect of outstanding statutory dues as aforesaid as at 31st March 2016 for a period of more than six months from the date they became payable.
viii According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues of loans taken from banks. The Company did not have any outstanding dues in respect of financial institution, government or debenture holders during the year.
ix The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.
x During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to information and explanation given to us, we have neither come across any instance of fraud on or by the Company, its officers or employees, noticed or reported during the period, nor have we been informed of such case by the management.
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 for managerial remuneration in accordance with the requisite approvals mandated by the provision s of Section 197 read with Schedule V to the Act.
xii In our opinion and according the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, provision of Clause 3(xii) of the Order is not applicable.
xiii According to the information and explanation given to us and based on our verification of the records of the Company and on the basis of review and approval by the Board and Audit Committee, the transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable 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 explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review. Accordingly, the provision of Clause 3(xiv) of the Order is not applicable.
xv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them. Accordingly, the provision of Clause 3(xv) of the Order is not applicable.
xvi The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
ANNEXURE B TO INDEPENDENT AUDITORSEREPORT
Referred to in paragraph 10(f) of the Independent Auditors'' Report of even date to the members of Gini Silk Mills Limited on the financial statements for the year ended March 31, 2016.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
1. We have audited the internal financial controls over financial repotting of Gini Silk Mills Limited ("the Company") as of March 31,2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial repotting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls ever financial reporting included obtaining an understanding of internal financial controls ever financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial repotting.
Meaning of Internal Financial Controls over Financial Reporting
6. A Company''s internal financial control ever financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles .A Company''s internal financial control ever financial reporting includes those policies and procedures that
i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation cf the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31,2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Vatsaraj & Co.
Chartered Accountants
Firm Registration Number: 111327W
CA Nitesh K Dedhia
Partner
Membership Number 114893
Mumbai, May 30, 2016
Mar 31, 2015
1) We have audited the accompanying financial statements of Gini Silk
Mills Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2015, 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
2) 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 to 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 the
maintenance of adequate accounting records in accordance with the
provision of the Act for safeguarding of the assets of the Company and
for preventing and detecting the 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 control,
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.
Auditors' Responsibility
3) Our responsibility is to express an opinion on these financial
statements based on our audit.
4) We have taken into account the provisions of the Act and the Rules
made thereunder including the accounting standards and matters which
are required to be included in the audit report.
5) We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act & other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements 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.
6) 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. but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls systems 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 Director, as well as
evaluating the overall presentation of the financial statements.
7) 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
8) 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 March 31,2015, and its Profit and its cash flows for the year ended
on that date.
Report on other Legal and Regulatory Requirements
9) As required by The Companies (Auditor's Report) Order, 2015'
issued by the Central Government of India in terms of sub- section (11)
of the section 143 of the Act (hereinafter referred to as the
"Order"), and on the basis of such checks of the
books & records of the Company as we considered appropriate and
according to the information and explanation given to us, we give in
the annexure a statement on the matters specified in paragraph 3 and 4
of the Order.
10) 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 and Loss, and 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 representations received from the directors
as on 31 March, 2015, taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March, 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 & Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to information and explanations given to us:
i) The Company has disclosed the impact of pending litigations as at
March 31,2015 on its financial position, in its financial statements.
ii) The Company has made provision as at March, 31 2015 as required
under the applicable law or accounting standards, for material
foreseeable losses, if any, on long term contracts including derivative
contracts.
iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection fund by the
Company during the year ended March 31,2015.
Annexure to Independent Auditors Report
The Annexure referred to in paragraph 9 of the Our Report of even date
to the members of GINI SILK MILLS LIMITED for the year ended 31st
March, 2015.
1. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
2. a) The inventory, including stocks with certain third parties, has
been physically verified by the management at reasonable intervals
during the year. In our opinion, the frequency of such 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 are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories. As explained to us, there was no material discrepancies
noticed on physical verification of inventories as compared to book
records.
3. The Company has not granted any loan, secured or unsecured to
companies, firms or other parties, covered in the register maintained
under section 189 of the Act.
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 the nature of its business, for the
purchase of inventories and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weaknesses in internal control system.
5. The Company has not accepted any deposits from the public during the
year. Therefore, the provisions of the clause 3 (v) of the order are
not applicable to the Company.
6. We have broadly reviewed the cost records maintained by the company
as specified by Central Government of india under sub section (1) of
section 148 of the Act, and we are of opinion that prima facie the
prescribed accounts and records have been maintained. We have, however,
not made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
7. a) According to information and explanation given to us and the
records of the company examined by us, undisputed statutory dues
including Provident Fund, Employees' State Insurance, Income-tax,
Sales-tax, Value added tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and any other material statutory dues have been
generally regularly deposited with the appropriate authorities. b)
According to the information and explanation given to us and the
records of the company examined by us, the disputed statutory dues
aggregating Rs.20,814,796/- that have not been deposited on account of
disputed matters pending before appropriate authorities are as under:
Name of the Statute Nature of Dues Amounts (INR)
Central Excise Act Demand for interest and
penalty on differential 2,15,820/-
amount of excise duty
Excise Service Tax Demand for Deemed Credit 3,38,418/-
Textile Committee Collection of Cess under
the Textile Committee 2,99,150/-
Act and Cess Rules reg.
Central Excise Act Demand on differential
amount of excise duty 1,85,09,688/-
for the period 16/12/98
to 28/02/2001
Income tax act Demand for A.Y.2012-13 14,51,720/-
Total 20,814,796/-
Name of the Statue Forum where dispute is pending
Central Excise Act Commissioner of Central Excise (Appeal)
Excise Service Tax Registrar the Customs Excise Service Tax
Appellate Tribunal
Textile Committee Textile Committee Cess Appellate Tribunal.
Central Excise Act Supreme Court of India
Income tax act Departmental Authorities
c) The amount required to be transferred to Investor Education &
Protection fund has been transferred within the stipulated time in in
accordance with the relevant provisions of the Companies Act,1956 (1 of
1956) and rules made there under.
8. The Company does not have any accumulated losses at the end of the
financial year and the company has not incurred cash losses in current
financial year and in the immediately preceding financial year;
9. According to the records of the company examined by us and the
information and explanation given to us, the company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holder as at the balance sheet date.
10. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
11. In our opinion, and according to the information and explanation
given to us, the term loans have been applied, on an overall basis, for
the purpose for which they were obtained.
12. During the course of our examination of books & records of the
Company, carried out in accordance with the generally accepted auditing
practice in India, and according to the information and explanation
given to us, we have neither come across any instance of material fraud
on or by the Company, noticed or reported during the year, nor we have
been informed of any such case by the Management.
For Vatsaraj & Co.
Chartered Accountants
FRN: 111327W
CA Nitesh K Dedhia
Place: Mumbai Partner
Date: 28/05/2015 M. No.: 114893
Mar 31, 2014
1. We have audited the accompanying financial statements of Gini Silk
Mills Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2014, the Statement of Proft and Loss and the Cash Flow
Statement for the year then ended, and a summary of signifcant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. The Company''s Management is responsible for the preparation of
these fnancial statements that give a true and fair view of the
fnancial position and fnancial performance 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 13th 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
fnancial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. 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.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the fnancial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the fnancial
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 fnancial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the fnancial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the fnancial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Proft and Loss, of the proft for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fows for the
year ended on that date.
Report on other Legal and Regulatory Requirements
7. 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, and on the basis of such checks
as we considered appropriate and according to the information and
explanations given to us, we annex hereto a statement on the matter
specifed in paragraphs 4 and 5 of the said Order.
8. Further to our comments in the Annexure referred to 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 accounts 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 Proft and Loss Account and the
Cash Flow Statement of the Company dealt with by this report are in
agreement with the books of accounts of the Company;
(d) in our opinion, the Balance Sheet, the Statement of Proft and Loss
and the 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 read with the General Circular 15/2013 dated
13th September 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act 2013;
(e) on the basis of written representations received form the
Directors, as on March 31, 2014 and taken on record by the Board of
Directors, we report that none of the Director is disqualifed as on
March 31, 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 Independent Auditors Report
The Annexure referred to in paragraph 1 of the Our Report of even date
to the members of GINI SILK MILLS LIMITED for the year ended 31st
March, 2014.
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
1. In respect of its fixed assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of its fxed assets.
b) As explained to us, fixed assets have been physically verifed by the
management at reasonable intervals; no material discrepancies were
noticed on such verifcation.
c) In our opinion and according to the information and explanations
given to us, the company has not disposed off a substantial part of its
fxed assets and the going concern status of the Company is not
affected.
2. In respect of its inventories:
a) As explained to us, inventories have been physically verifed by the
management at reasonable intervals during the year. In our opinion, the
frequency of such verifcation is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifcation of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c) The Company has maintained proper records of its inventories. As
explained to us, there was no material discrepancies noticed on
physical verification of inventories as compared to book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the company to / from companies, frms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has not granted any loans, secured or unsecured to
companies, frms or other parties covered in the register maintained
under section 301 of the Act. Accordingly para 1(iii) (a), (b), (c),
and (d) is not applicable.
b) The Company has not taken loans from companies, frms or other
parties listed in the register maintained under Section 301 of the
Companies Act, 1956 except for unsecured loans, taken from two
directors payable on demand. The amount outstanding as on 31.03.2014
Rs.2,87,008/- and the maximum amount outstanding during the year is
Rs.73,30,027/-.
f) The rate of interest and other terms and conditions of loans taken
by the company, are, in our opinion, prima facie not prejudicial to the
interest of the company; and
g) Repayment of the principal amount and interest is on demand.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fxed assets and payment for
expenses & for sale of goods. During the course of our audit, we have
not observed any major weaknesses in internal control system.
5. a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
particulars of contracts or arrangements referred to in section 301 of
the Act have been entered in the register required to be maintained
under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding value of Rs. 5,00,000/- of any party during
the year have been made at prices which are reasonable having regard to
the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public,
hence the directives issued by the Reserve bank of India and the
provisions of sections 58A and 58AA or any relevant provisions of the
Act and the rules framed there under are not applicable.
7. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act,1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
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, Custom Duty, Excise Duty, Cess and any other statutory dues have
been generally regularly deposited with the appropriate authorities.
b) The disputed statutory dues aggregating Rs.1,93,63,076/- that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the Nature of Dues Amounts (Rs.)
Statute_
Central Excise Demand for interest and penalty on
differential 2,15,820/-
Act amount of excise duty
Excise Service Demand for Deemed Credit 3,38,418/-
Tax
Textile Collection of Cess underthe Textile 2,99,150/-
Committee Committee Act and Cess Rules reg.
Central Excise Demand on differential amount of 1,85,09,688/-
Act excise duty for the period 16/12/98
to 28/02/2001
Total 1,93,63,076/-
Name of the Statute Forum where dispute is pending
Central Excise Act_ Commissioner of Central Excise (Appeal)_
Excise Service Tax Registrar the Customs Excise Service Tax
Appellate Tribunal
Textile Committee Textile Committee Cess Appellate Tribunal.
Central Excise Act Supreme Court of India
10. The company does not have any accumulated losses at the end of the
fnancial year and the company has not incurred cash losses in current
fnancial year and in the immediately preceding fnancial year;
11. In our opinion and according to the information and explanations
given to us, the company is regular in repaying dues to the bank. There
are no dues to Financial Institution and there are no debenture holders
in the current year.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi /mutual beneft
fund/society. Therefore, the provision of this clause of the Companies
(Auditor''s Report) Order, 2003 (as amended) is not applicable to the
Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or fnancial institution.
16. The Company has not obtained any term loans during the year.
Accordingly the provisions of clause 4(xvi) of the Order are not
applicable to the Company.
17. According to the information and explanations given to us and on
overall examination of the Balance sheet of the Company, we are of the
opinion that there are no funds raised on short-term basis that have
been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Act. Accordingly the provisions of clause 4 (xviii) of the
Order are not applicable to the Company.
19. The Company has not issued any debentures. Accordingly the
provisions of clause 4 (xix) of the Order are not applicable to the
Company.
20. The Company has not raised money by public issues during the year.
Accordingly the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
For Vatsaraj & Co.
Chartered Accountants
FRN: 111327W
CA Nitesh K Dedhia
Place: Mumbai (Partner)
Date: 27/05/2014 M.No: 114893
Mar 31, 2013
We have audited the accompanying financial statements of Gini Silk
Mills Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information. Management''s
Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial posi- tion,
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"). 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 accor- dance
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. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our.audit opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) in the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date. Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003
("theOrder") 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 para- graphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
referred to in subsection (3C) of section 211 of the Companies Act,
1956;
e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, 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 Independent Auditors Report
The Annexure referred to in paragraph 1 of the Our Report of even date
to the members of GINI SILK MILLS LIMITED for the year ended 31st
March, 2013.
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
1. In respect of its fixed assets:
a. The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
b. As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
c. In our opinion and according to the information and explanations
given to us, the company has not disposed off a substantial part of its
fixed-assets and the going concern status of the Company is not
affected.
2. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at reasonable intervals during the year. In our opinion,
the frequency of such 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 are reasonable and adequate in relation to
the size of the company and the nature of its business.
c. The Company has maintained proper records of its inventories. As
explained to us.there were no material discrepancies noticed on
physical verification of inventories as compared to book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a. The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly para 1(iii) (a), (b), (c),
and (d) is not applicable.
e) The Company has not taken loans from companies, firms or other
parties listed in the register maintained under Section 301 of the
Companies Act, 1956 except for unsecured loans, taken from two
directors payable on demand. The amount outstanding as on 31,03.2013 Rs.
57,80,027/- and the maximum amount outstanding during the year is Rs.
2,67, 27,415/-.
f) The rate of interest and other terms and conditions of loans taken
by the company, are, in our opinion, prima facie not prejudicial to the
interest of the company; and
g) Repayment of the principal amount and interest is on demand
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods. During the course of our audit, we
have not observed any major weaknesses in internal control system.
5. a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
particulars of contracts or arrangements referred to in section 301 of
the Act have been entered in the register required to be maintained
under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding value of Rs. 5,00,000 of any party during the
year have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public,
hence the directives issued by the Reserve bank of India and the
provisions of sections 58A and 58AA or any relevant provisions of the
Act and the rules framed there under are not applicable.
7. '' In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting " Records) Rules, 2011
prescribed by the Central Government under Section 209(1 )(d) of the
Companies Act,1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have,however, not made
a detailed examination of the cost records with a view to determine
whether they are accurate or complete.
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, Custom Duty, Excise Duty, Cess and any other statutory dues have
been generally regularly deposited with the appropriate authorities.
10. The company does not have any accumulated losses at the end of the
financial year and the company has not incurred cash losses in current
financial year and in the immediately preceding financial year;
11. In our opinion and according to the information and explanations
given to us, the company is regular in repaying dues to the bank. There
are no dues to Financial Institution and there are no debenture holders
in the current year.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi /mutual benefit
fund/society. Therefore, the provision of this clause of the Companies
(Auditor''s Report) Order, 2003 (as amended) is not applicable to the
Company.
14. The Company has maintained proper records of the transactions and
contracts iii respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
16. The Company has not obtained any term loans during the year.
Accordingly the provisions of clause 4(xvi) of the Order are not
applicable to the Company.
17. According to the information and explanations given to us and on
overall examination of the Balance sheet of the Company, we are of the
opinion that there are no funds raised on short-term basis that have
been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Act. Accordingly the provisions of clause 4 (xviii) of the
Order are not applicable to the Company.
19. The Company has not issued any debentures. Accordingly the
provisions of clause 4 (xix) of the Order are not applicable to the
Company.
20. The Company has not raised money by public issues during the year.
Accordingly the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
21. According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
year.
For Vatsaraj & Co.
Chartered Accountants
FRN: 111327W
CA Nitesh K Dedh.ia
(Partner)
M.No: 114893
Place: Mumbai
Date:
Mar 31, 2012
1) We have audited the attached balance sheet of GINI SILK MILLS
LIMITED as at 31st March, 2012 and the relative 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. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
includes examining, on a test basis,-evidence supporting the amounts
and disclosures in the financial statements. An dud it 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 of India in terms of section
(4A) of section 227 of the Companies Act, 1956, we enclose in the
annexure a statement on the matters specified in paragraphs 4 & 5 of
the said Order.
4) Further to our comments in the Annexure referred to in paragraph (1)
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 accounts 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 requirements
of the accounting standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956;
e) 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 Section 274(1 )(g)
of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, they said accounts ' read together with
the notes as per Notes No. 1 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 the Balance Sheet, of the state of affairs of the
company as at 31 st March 2012;
ii) In the case of the Profit and Loss account 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.
ANNEXURE TO AUDITORS' REPORT
The Annexure referred to in paragraph 1 of the Auditor's Report to
the members of GINI SILK MILLS LIMITED for the year ended 31st March
2012.
(i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management
during the year; in our opinion the frequency of verification is
reasonable having regard to the size of the company and nature of its
assets. No material discrepancies were noticed on such verification.
(c ) The Company has not disposed off substantial part of its fixed
assets so as to affect its going concern status.
(ii) (a) As explained to us, inventories have been physically verified
by the management at reasonable intervals during the year. In our
opinion, the frequency of such verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noted on verification between the physical stocks and the
book records were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly para 1(iii) (a), (b), (c),
and (d) is not applicable.
(e) The company has not taken any loans from companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 except for unsecured loans, taken from two directors
payable on demand. The amount outstanding as on 31.3.2012 Rs
15,377,415/-. And the maximum amount outstanding during the year is Rs
18,939,565/-.
(f) The rate of interest and other terms and conditions of loans taken
by the company, are, in' our opinion, prima facie not prejudicial to the
interest of the company; and
(g) Repayment of the principal amount and interest is on demand.
(iv) In our opinion and based on the information and explanations given
to us, there is an adequate internal control system commensurate with
the size of the company and the nature of its business for purchase of
inventory and fixed assets and for the 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) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that Section; and
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding value of rupees five lakhs of any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.,
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted deposits from the public,
hence the directives issued by the Reserve Bank of India and the
provisions of sections 58A and 58AA or any relevant provisions of the
Act and the rules framed there under are not applicable. *
(vii) Based on the records examined by us and information and
explanations given to us, in our opinion, the company has an internal
audit system commensurate with its size and nature of its business;
(viii) The company has maintained the records relating to materials,
labour or any other items of cost prescribed pursuant to the Rules made
by Central Government for the maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956.
(ix) (a) Based on the records examined by us and according to the
information and explanation given to us, the company is regular in
depositing undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees' State Insurance,
Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and
any other statutory dues with the appropriate authorities except for
Service Tax of" NIL /- were outstanding as at 31st March, 2012 for a
period of more than six month from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of income tax/Sales Tax / wealth tax/ Service Tax/ Custom
Duty /excise duty/cess which have not been deposited with the
appropriate authorities on account of any dispute except for the
following;
Name of
the Statute Nature of Dues Amounts (Rs) Forum where dispute is
pending
Central
Excise Act Demand for
interest and
penalty on 2,15,820/- Commissioner of Central
differential
amount of
excise duty Excise (Appeal)
Excise
Service Tax Demand for
Deemed Credit 2,38,418/- Registrar the Customs
Excise Service Tax
Appellate Tribunal
Textile
Committee Collection of
cess under the
Textile 2,99,150/- Textile Committee Oess
Committee Act
and cess Rules
reg. Appellate Tribunal
Central
Excise Act Demand on diffe
rential amount
of excise duty 1,85,09,688/- Supreme Court of India
for the period
16/12/98 to
28/02/2001
(x) The company does not have any accumulated losses at the end of the
financial year and the company has not incurred cash losses in current
financial year and in the immediately preceding financial year;
(xi) In our opinion and according to the inform action and explanations
given to us, the company is regular in repaying dues to the bank. There
are no dues to Financial Institute and there are no debenture holders
in current year.
(xii) The company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) This is not a chit fund or nidhi / mutual benefit
fund/societies. Accordingly the provisions of clause 4 (xiii) of the
Order are not applicable to the Company.
(xiv) According to the information and explanations given to us and on
the basis of records examined by us, in our opinion the company is not
dealing or trading in shares, securities, debentures and other
investments. Accordingly the provisions of clause 4 (xiv) of the
Order. 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 bank
or financial institutions.
(xvi) The Company has not obtained any term loans during the year.
Accordingly the provisions of clause 4 (xvi) of the Order are not
applicable to the Company.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, there are
no funds raised on short term basis during the year under audit and
hence the question of using the same for long term investment dose not
arise.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the Register maintained under
section 301 of the Act. Accordingly the provisions of clause 4 (xviii)
of the Order are not applicable to the Company.
(xix) The Company has not issued any debentures. Accordingly the
provisions of clause 4 (xix) of the Order are not applicable to the
Company.
(xx) The Company has not raised money by public issues during the year.
Accordingly the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
year.
For Vatsaraj & Co.
Chartered Accountants
CA Nitesh K Dedhia
Partner
Place: Mumbai M.No.114893
Date: 05/07/2012 FRN:111327W
Mar 31, 2011
1) We have audited the attached balance sheet of GINI SILK MILLS
LIMITED as at 31st March, 2011 and the relative 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. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from 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 of India in terms of section
(4A) of section 227 of the Companies Act, 1956, we enclose in the
annexure a statement on the matters specified in paragraphs 4 & 5 of
the said Order.
4) Further to our comments in the Annexure referred to in paragraph (1)
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 accounts 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 requirements
of the accounting standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956;
e) On the basis of written representation received from the directors
as on 31s1 March, 2011 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31st March,
2011 from being appointed as a director in terms of Section 274(1 )(g)
of the Companies Act, 1956;
f) 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
notes as per Schedule 'R' 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 the Balance Sheet, of the state of affairs of the
company as at 31st March 2011;
ii) In the case of the Profit and Loss account 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.
ANNEXURE TO AUDITORS' REPORT
The Annexure referred to in paragraph 1 of the Auditor's Report to the
members of GINI SILK MILLS LIMITED for the year ended 31st March 2011.
(i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management
during the year; in our opinion the frequency of verification is
reasonable having regard to the size of the company and nature of its
assets. No material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of its fixed
assets so as to affect its going concern status.
(ii) (a) As explained to us, inventories have been physically verified
by the management at reasonable intervals during the year. In our
opinion, the frequency of such verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noted on verification between the physical stocks and the
book records were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly para 1(iii) (a), (b), (c),
and (d) is not applicable.
(e) The company has not taken any loans from companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 except for unsecured loans, taken from two directors
payable on demand. The amount outstanding as on 31.3.2011 Rs.
2,755,509/-. And the maximum amount outstanding during the year is Rs.
84,50,000/-.
(f) The rate of interest and other terms and conditions of loans taken
by the company, are, in our opinion, prima facie not prejudicial to the
interest of the company; and
(g) Repayment of the principal amount and interest is on demand.
(iv) In our opinion and based on the information and explanations given
to us, there is an adequate internal control system commensurate with
the size of the company and the nature of its business for purchase of
inventory and fixed assets and for the 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) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that Section; and
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding value of rupees five lakhs of any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted deposits from the public,
hence the directives issued by the Reserve Bank of India and the
provisions of sections 58A and 58AA or any relevant provisions of the
Act and the rules framed there under are not applicable.
(vii) Based on the records examined by us and information and
explanations given to us, in our opinion, the company has an internal
audit system commensurate with its size and nature of its business;
(viii) The company has maintained the records relating to materials,
labour or any other items of cost prescribed pursuant to the Rules made
by Central Government for the maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956.
(ix) (a) Based on the records examined by us and according to the
information and explanation given to us, the company is regular in
depositing undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees' State Insurance, Income-tax,
Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other
statutory dues with the appropriate authorities except for Service Tax
of Rs. NIL were outstanding as at 31st March, 2011 for a period of more
than six month from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of income tax/Sales Tax / wealth tax/ Service Tax/ Custom
Duty /excise duty/cess which have not been deposited with the
appropriate authorities on account of any dispute except for the
following;
Name of the Nature of Dues Amounts (Rs.) Forum where
Statute dispute is
pending
Central Demand for interest 2,15,8207- Commissioner
Excise and penalty on of Central Excise
Act differential amount (Appeal)
of excise duty
Excise Demand for Deemed 2,38,418/- Registrar the
Service Credit Customs Excise
Tax Service Tax
Tax Applellate
Tribunal
Textile Collection of cess 2,99,150/- Textile Committee
under the Textile Cess Appellate
Committee Act and Tribunal.
cess Rules reg.
Central Demand on differen 1,85,09,688/- Supreme Court
Excise tial amount of of India
Act excise duty for the
period 16/12/98
to 28/02/2001
(x) The company does not have any accumulated losses at the end of the
financial year and the company has not incurred cash losses in current
financial year and in the immediately preceding financial year;
(xi) In our opinion and according to the information and explanations
given to us, the company is regular in repaying dues to the bank. There
are no dues to Financial Institute and there are no debenture holders
in current year.
(xii) The company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) This is not a chit fund or nidhi / mutual benefit
fund/societies. Accordingly the provisions of clause 4 (xiii) of the
Order are not applicable to the Company.
(xiv) According to the information and explanations given to us and on
the basis of records examined by us, in our opinion the company is not
dealing or trading in shares, securities, debentures and other
investments. Accordingly the provisions of clause 4 (xiv) of the Order
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 bank
or financial institutions.
(xvi) The Company has not obtained any term loans during the year.
Accordingly the provisions of clause 4 (xvi) of the Order are not
applicable to the Company.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, there are
no funds raised on short term basis during the year under audit and
hence the question of using the same for long term investment dose not
arise.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the Register maintained under
section 301 of the Act. Accordingly the provisions of clause 4 (xviii)
of the Order are not applicable to the Company.
(xix) The Company has not issued any debentures. Accordingly the
provisions of clause 4 (xix) of the Order are not applicable to the
Company.
(xx) The Company has not raised money by public issues during the year.
Accordingly the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
year.
For Vatsaraj & Co.
Chartered Accountants
Registration No. 111327W
CA Nitesh K Dedhia
(Partner)
M.No.114893
Place: Mumbai
Date: 25.07.2011
Mar 31, 2010
1. We have audited the attached balance sheet of GINI SILK MILLS
LIMITED as at 31st March, 2010 and the related 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 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 from 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 of India in terms of section
(4A) of section 227 of the Companies Act, 1956, we enclose in the
annexure a statement on the matters specified in paragraphs 4 & 5 of
the said Order.
4. Further to our comments in the Annexure referred to in paragraph
(1) 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 accounts 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 requirements
of the accounting standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956;
(e) 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 31st March,
2010 from being appointed as a director in terms of Section 274(1 )(g)
of the Companies Act, 1956;
(f) 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
notes as per Schedule FT 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 the Balance Sheet, of the state of affairs of the
company as at 31st March 2010
(ii) In the case of the Profit and Loss account 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.
ANNEXURE TO AUDITORS REPORT
The Annexure referred to in paragraph 1 of the Auditors Report to the
members of GINI SILK MILLS LIMITED for the year ended 31st March 2010.
(i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management
during the year; in our opinion the frequency of verification is
reasonable having regard to the size of the company and nature of its
assets. No material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of its fixed
assets so as to affect its going concern status.
(ii) (a) As explained to us, inventories have been physically verified
by the management at reasonable intervals during the year. In our
opinion, the frequency of such verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noted on verification between the physical stocks and the
book records were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured,
to companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly para 1 (iii) (a), (b), (c)
and (d) is not applicable.
(e) The company has not taken any loans from companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 except for unsecured loans, taken from two directors
payable on demand. The amount outstanding as on 31.3.2010 Rs.
2,682,710/-. And the maximum amount outstanding during the year is
?18,952,356/-.
(f) The rate of interest and other terms and conditions of loans taken
by the company, are, in our opinion, prima facie not prejudicial to the
interest of the company; and
(g) Repayment of the principal amount and interest is on demand.
(iv) In our opinion and based on the information and explanations given
to us, there is an adequate internal control system commensurate with
the size of the company and the nature of its business for purchase of
inventory and fixed assets and for the 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) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that Section; and
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding value of rupees five lakhs of any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted deposits from the public,
hence the directives issued by the Reserve Bank of India and the
provisions of sections 58A and 58AA or any relevant provisions of the
Act and the rules framed there under are not applicable.
(vii) Based on the records examined by us and information and
explanations given to us, in our opinion, the company has an internal
audit system commensurate with its size and nature of its business;
(viii) The company has maintained the records relating to materials,
labour or any other items of cost prescribed pursuant to the Rules made
by Central Government for the maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956.
(ix) (a) Based on the records examined by us and according to the
information and explanation given to us, the company is regular in
depositing undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income-tax,
Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other
statutory dues with the appropriate authorities except for Service Tax
of Rs. 1,31,810/- were outstainding as at 31st March, 2010 for a period
of more than six month from the date of becoming payable
(b) According to the information and explanations given to us, there
are no dues of income tax/Sales Tax / wealth tax/ Service Tax/ Custom
Duty /excise duty/cess which have not been deposited with the
appropriate authorities on account of any dispute except for the
following;
Name of
the Statute Nature of Dues Amounts (Rs.) Forum where dispute is pending
Central Excise
Act Demand for
interest and
penalty 2,15,820/- Commissioner of Central
on differential
amount of excise
duty Excise (Appeal)
Excise
Service Tax Demand for
Deemed Credit 2,38,418/- Registrar the Customs Excise
Service Tax Applellate Tribunal
Textile
Committee Collection of cess
under the Textile 2,99,150/- Textile Committee Cess
Committee Act and
cess Rules reg. Appellate Tribunal.
Central
Excise Act Demand on differential
amount of 1,85,09,688/- Supreme Court of
India
excise duty for
the period
16/12/98 I to
28/02/2001
(x) The company does not have any accumulated losses at the end of the
financial year and the company has not incurred cash losses in current
financial year and in the immediately preceding financial year;
(xi) In our opinion and according to the information and explanations
given to us, the company is regular in repaying dues to the bank. There
are no dues to Financial Institute and there are no debenture holders
in current year.
(xii) The company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) This is not a chit fund or nidhi / mutual benefit
fund/societies. Accordingly the provisions of clause 4 (xiii) of the
Order are not applicable to the Company.
(xiv) According to the information and explanations given to us and on
the basis of records examined by us, in our opinion the company is not
dealing or trading in shares, securities, debentures and other
investments. Accordingly the provisions of clause 4 (xiv) of the Order
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 bank
or financial institutions.
(xvi) The Company has not obtained any term loans during the year.
Accordingly the provisions of clause 4 (xvi) of the Order are not
applicable to the Company.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, there are
no funds raised on short term basis during the year under audit and
hence the question of using the same for long term investment dose not
arise.
(xviii)The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Act. Accordingly the provisions of clause 4 (xviii) of the
Order are not applicable to the Company.
(xix) The Company has not issued any debentures. Accordingly the
provisions of clause 4 (xix) of the Order are not applicable to the
Company.
(xx) The Company has not raised money by public issues during the year.
Accordingly the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
year.
For Vatsaraj & Co.
Chartered Accountants
CA Mayur Kisnadwala
Place : Mumbai (Partner)
Date : 19/08/2010 M.No. 33994
FRN: 111327W