Mar 31, 2011
1. We have audited the attached Balance Sheet of M/s. Silktex Limited,
as at 31 st March 2011, and also the Profit and Loss Account and the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of Sub-Section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the annexure a
statement on the matters specified in Paragraph '4' and '5' of the said
Order.
4. Further to our comments in the annexure referred to above, we
report that:
(i) Reference is invited to the following notes in Schedule '18'- Notes
on Accounts :
a) Note No.: B (6): regarding long pending business advances given to
suppliers, which have been classified as considered good by the
management;
b) Note No.: B (I): regarding inventories valuation on the basis of
costing records certified by cost accountant and at the general average
rates.
5. Subject to the above :
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
(iii) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
(iv) In bur opinion the Balance Sheet, Profit and Loss Account and the
Cash Flow Statement dealt with by this report, comply with the
accounting standards referred in Sub-Section (3C) of Section 211 of the
Companies Act, 1956 subject to Clause 4 (i) (b).
(v) On the basis of representations received from the directors and the
Company, which has been taken on record by the Board of Directors and
on the basis of review of such representations by us, we report that
none of the Directors prima facie as on 31 st March, 201 I are
disqualified from being appointed as Directors of the Company in terms
of Clause (g) of Sub-Section (I) of Section 274 of the Companies Act,
1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts subject to Paragraph 4
(i) above, and read together with notes thereon give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India :
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 201 I;
b) in the case of the Profit and Loss Account, of the Loss for the year
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT:
ANNEXURE REFERRED TO IN PARAGRAPH '3' OF THE REPORT TO THE SHARE
HOLDERS OF M/s. SILKTEX LIMITED, BANGALORE, ON THE ACCOUNTS FOR THE
YEAR ENDED 31 st MARCH, 2011:
1. a) The Company has generally maintained proper records showing
particulars of fixed assets including quantitative details and their
location.
b) As explained to us, some of the fixed assets were physically
verified by the management during the year in accordance with the
program of verification of fixed assets. In our opinion the frequency
of verification is reasonable considering the size and the nature of
its assets. According to the information and explanations given to us
no material discrepancies were noticed on such verification.
c) During the year the Company has not disposed off any major fixed
assets.
2. a) According to the information and explanations given to us, the
management has physically verified the stock of raw materials and
finished goods twice during the year.
b) In our opinion the procedures and documentation standards of
physical verification of all the inventories followed by the management
needs to be strengthened to provide, adequate details and
classification of inventories in the physical verification
documentation. in relation to the size of the Company and nature of
its business.
c) The Company has maintained proper records of inventories and
production. In our opinion and according to information and
explanations given to us the discrepancies noticed on physical
verification of stocks were not material in relation to the operations
of the Company and the same have been properly dealt with in the books
of account.
3. 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 Companies Act, 1956. b)
The Company has not taken any loans from parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
4. In our opinion, the internal control procedures for the purchase of
inventory and fixed assets and sale of goods are commensurate with the
size of the Company and the nature of its business except in the area
of control over advance for purchases which needs to be strengthened.
During the course of our audit, no other major weakness has been
noticed in the internal control system.
5. a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that Section.
b) There are no transactions of purchases and sale of goods, materials
and services made in pursuance of contracts or arrangements entered in
the register maintained under Section 301 of the Companies Act, 1956,
aggregating during the year to Rs.5,00,000/- or more in respect of each
party.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits during the year
from the public within the meaning of the provisions of Section 58A and
58AA or any other relevant provisions of the Companies Act, 1956 and
rules made thereunder.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. According to the explanations given to us, the Central Government
has prescribed maintenance of cost records under Section 209( I )(d) of
the Companies Act, 1956 for the products of the Company. As per the
certificate issued by a Cost Accountant, the Company has maintained
adequate cost records as prescribed. However we have not carried out
the detailed examination of such records.
9. a)According to the records of the Company, the Company is generally
regular in depositing undisputed statutory dues including Provident
Fund, Employee's State Insurance, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues.
According to the information and explanations given and the records
verified by us, as on the balance sheet date there were no arrears in
respect of such statutory dues outstanding for a period of more than
six months from the date they became payable as on 31 st March, 2011
except Service Tax k 2,82,865/- and Karnataka Value Added Tax Rs.
9,765/-. There is no unremitted and overdue unpaid dividends into the
'Investor Education and Protection Fund' as on 31st March, 2011.
b) According to the information and explanations given to us, there is
disputed amount of entry tax dues Rs. 1,54,253/- relating to 2003-2004
which is under appeal at Assistant Commissioner of Commercial Taxes,
City Division, Bangalore. There are no dues of Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess which have not been deposited on
account of any disputes.
10. The Company do not have accumulated losses. The Company has
incurred cash losses in the financial year and did not incur any cash
loss in the financial year immediately preceeding the financial year
under audit.
11. According to the information and explanations given to us there
were no defaults in repayment of dues to financial institutions or
banks.
12. The Company has not granted any advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company is not carrying on any chit fund, nidhi and mutual
benefit fund businesses.
14. The Company is not engaged in dealing or trading in shares,
securities, debentures and other investments.
15. The Company has not issued any guarantees to any external parties
for loans taken by others from bank or financial institutions.
16. The Company has applied the term loan for the purpose for which it
is obtained.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investment.
18. The Company has not made any preferential allotment of shares
during the financial year being audited.
19. The Company has not issued any debentures during the financial
year being audited.
20. The Company has not raised any money by public issue during the
financial year being audited.
21. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the year under report.
For G. BAGRODIA AND COMPANY
Chartered Accountants
FirmRegn.No.:0003l2S
(G.B. BAGRODIA)
Partner
Membership No.: 14608
Place : Bangalore
Date : 30-05-2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s. Silktex Limited,
as at 31st March, 2010, and also the Profit and Loss Account and the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Sub-Section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the annexure a
statement on the matters specified in Paragraph Ã4 and Ã5 of the said
Order.
4. Further to our comments in the annexure referred to above, we
report that : Reference is invited to the following notes in Schedule
18 - Notes on Accounts :
a) Note No.: B (6) : regarding long pending business advances given to
suppliers, which have been classified as considered good by the
management;
b) Note No.: B (1) : regarding inventories valuation on the basis of
costing records certified by cost accountant and at the general average
rates. Further old unsold traded goods are valued at cost but we are
not able to comment on the carrying value of traded goods;
5. Subject to the above :
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
(iii) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
(iv) In our opinion the Balance Sheet, Profit and Loss Account and the
Cash Flow Statement dealt with by this report, comply with the
accounting standards referred in Sub-Section (3C) of Section 211 of the
Companies Act, 1956 subject to Clause 4 (b).
(v) On the basis of representations received from the Directors and the
Company, which has been taken on record by the Board of Directors and
on the basis of review of such representations by us, we report that
none of the Directors prima facie as on 31st March, 2010 are
disqualified from being appointed as Directors of the Company in terms
of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act,
1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts subject to Paragraph 4
(i) above, and read together with notes thereon give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India :
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
b) in the case of the Profit and Loss Account, of the Loss for the year
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT:
ANNEXURE REFERRED TO IN PARAGRAPH Ã3 OF THE REPORT TO THE SHARE
HOLDERS OF M/s. SILKTEX LIMITED, BANGALORE, ON THE ACCOUNTS FOR THE
YEAR ENDED 31ST MARCH, 2010 :
1. a) The Company has generally maintained proper records
showing particulars of fixed assets including quantitative details and
their location.
b) As explained to us, some of the fixed assets were physically
verified by the Management during the year in accordance with the
program of verification of fixed assets. In our opinion the frequency
of verification is reasonable considering the size and the nature of
its assets. According to the information and explanations given to us
no material discrepancies were noticed on such verification.
c) During the year the Company has not disposed off any major fixed
assets.
2. a) According to the information and explanations given to
us, the Management has physically verified the stock of raw materials
and finished goods twice during the year.
b) In our opinion the procedures and documentation standards of
physical verification of all the inventories followed by the Management
needs further improvement in relation to the size of the Company and
nature of its business.
c) The Company has maintained proper records of inventories and
production. In our opinion and according to information and
explanations given to us the discrepancies noticed on physical
verification of stocks were not material in relation to the operations
of the Company and the same have been properly dealt with in the books
of account.
3. 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 Companies Act, 1956. b) The
Company has not taken any loans from parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
4. In our opinion, the internal control procedures for the purchase of
inventory and fixed assets and sale of goods are commensurate with the
size of the Company and the nature of its business except in the area
of purchases which needs to be strengthened. During the course of our
audit, no major weakness has been noticed in the internal control
system.
5. a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that Section. b) There
are no transactions of purchases and sale of goods, materials and
services made in pursuance of contracts or arrangements entered in the
register maintained under Section 301 of the Companies Act, 1956,
aggregating during the year to Rs. 5,00,000/- or more in respect of
each party.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits during the year
from the public within the meaning of the provisions of Section 58A and
58AA or any other relevant provisions of the Companies Act, 1956 and
rules made thereunder.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. According to the explanations given to us, the Central Government
has prescribed maintenance of cost records under Section 209(1)(d) of
the Companies Act, 1956 for the products
of the Company. As per the certificate issued by a Cost Accountant, the
Company has maintained adequate cost records as prescribed. However we
have not carried out the detailed examination of such records.
9. a) According to the records of the Company, the Company
is generally regular in depositing undisputed statutory dues including
Provident Fund, Employees State Insurance, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
Statutory dues. According to the information and explanations given
and the records verified by us, as on the balance sheet date there were
no arrears in respect of such statutory dues outstanding for a period
of more than six months from the date they became payable as on 31st
March, 2010 except Service Tax Rs.2,82,865/- and Karnataka Value Added
Tax Rs.9,765/-. There is no unremitted and overdue unpaid dividends
into the ÃInvestor Education and Protection Fund as on 31st March,
2010. b) According to the information and explanations given to us,
there are disputed amount of entry tax dues Rs. 1,54,253/- relating to
2003-2004 which is under appeal at Assistant Commissioner of Commercial
Taxes, City Division, Bangalore. There are no dues of Wealth Tax,
Service Tax, Customs Duty, Excise Duty and Cess which have not been
deposited on account of any disputes.
10. The Company do not have accumulated losses. The Company has not
incurred cash losses in the financial year and also in the financial
year immediately proceeding the financial year under audit
11. According to the information and explanations given to us there
were no defaults in repayment of dues to financial institutions or
banks.
12. The Company has not granted any advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company is not carrying on any chit fund, nidhi and mutual
benefit fund businesses.
14. The Company is not engaged in dealing or trading in shares,
securities, debentures and other investments.
15. The Company has not issued any guarantees to any external parties
for loans taken by others from bank or financial institutions.
16. The Company has applied the term loan for the purpose for which it
is obtained.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investment.
18. The Company has not made any preferential allotment of shares
during the financial year being audited.
19. The Company has not issued any debentures during the financial
year being audited.
20. The Company has not raised any money by public issue during the
financial being audited.
21. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the year under report.
For G. BAGRODIA AND COMPANY
Chartered Accountants
Firm No.: 000312S
(G.B. BAGRODIA)
PLACE : Bangalore Partner
DATE : 29-05-2010 Membership No.: 14608