options chain Auditors report
NACHMO KNITEX LIMITED
ANNUAL REPORT 2007-2008
AUDITORS REPORT
To,
The members of
NACHMO KNITEX LIMITED
Ahmedabad
1. We have audited the attached balance sheet of Nachmo Knitex Limited as
at March 31, 2008 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 mis-statement. 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 section 227 (4A) of the
Companies Act, 1956 of India 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
statement on the matters specified in the said order.
4. Further to our comments in the annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(b) In our opinion, proper books of account as required by law subject to
note no.9 of schedule 18(B) regarding non provision of Interest and
additional liability on account of withdrawal of CDR package 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, subject to note no.9 of schedule 18(B) regarding non-
provision of interest and additional liability on account of withdrawal of
CDR package the balance sheet, profit and loss account and cash flow
statement dealt with by this report comply with the accounting standards
referred to in section 211 (3C) of the Companies Act, 1956.
(e) On the basis of written representations received from the directors as
on March 31, 2008 and taken on record by the board of directors, we report
that, none of the directors is disqualified as on March 31, 2008 from being
appointed as director in terms of clause (g) of sub-section (1) of section
274 of the Companies Act, 1956.
(f) Attention is invited to note no.9 of schedule 18(B) regarding
additional liability due to withdrawal of corporate debt restructuring
(CDR) package and non-provision of interest amounting to Rs.283.12 lacs.
(g) Attention is invited to note no.12 of schedule 18(B) regarding
preparation of accounts on going concern assumption.
(h) Subject to the foregoing, in our opinion and to the best of our
information and according to the explanations given to us, the said
accounts read with significant accounting policies (schedule 18-A) and
notes thereon (schedule 18-B) 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 March 31, 2008.
(ii) In the case of profit and loss account, of loss of the company for the
year ended on that date; and
(iii) In the case of cash flow statement, of the cash flows for the year
ended on that date.
For Dhirajlal Shah & Go.
Chartered Accountants
Pravin R. Shah
Place: Ahmedabad Partner
Date : April 30, 2008 Membership no. :5390
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
i. a) The company has maintained proper records showing full particulars of
quantitative details and situation of fixed assets.
b) As explained to us, physical verification of a major portion of fixed
assets as at March 31, 2008 was conducted by the management during the
year. In our opinion, the frequency of physical verification is reasonable.
We are informed that no material discrepancies were noticed on such
verification.
c) According to information and explanations given to us, during the year,
the company has not disposed off any substantial/major part of fixed
assets.
II. a) As explained to us, the inventory has been physically verified at
the year end by the management. In our opinion, the frequency of
verification is reasonable.
b) In our opinion and according to the information and explanations given
to us, the procedures of physical verification of inventory 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 and on the basis of our examination of the records of inventory, the
company is maintaining proper records of inventory. The discrepancies
noticed on physical verification of inventory as compared to tire book
records were not material and have been properly dealt with in the books of
accounts.
III. a) The company has taken loan from two companies covered in the
register maintained under section 301 of the Companies Act, 1956. The
closing balance have been aggregating to Rs.75 lacs. In our opinion, the
rate of interest and other terms and condition on which loans have been
taken from companies listed in the register maintained under section 301 of
the Companies Act, 1956 are not prima facie, prejudicial to the interest of
the company. There are no repayment during the year and there are no
overdue amount of loans taken from the companies covered in the register
maintained under section 301 of the Companies Act, 1956.
b) The company has not granted any loans during the year to parties covered
in the register maintained under section 301 of the Companies Act, 1956.
Sub-clause (b), (c), (d) of the Subpara 4 of the order are not applicable.
IV. In our opinion and according to the information and explanations given
to us, there are adequate internal control procedures commensurate with the
size of the company and the nature of its business with regard to the
purchase of inventory, fixed assets and with regard to the sale of goods
and services. During the course of our audit, no major weakness has been
noticed in the internal controls.
V. In respect of contract or arrangement entered in the register maintained
in pursuance of section 301 of the Companies Act, 1956.
a) Based on audit procedures applied by us, to the best of our knowledge
and beliefand according to the information and explanations given to us,
we are of the opinion that the particulars of contracts and arrangements
that need to be entered into the register maintained under section 301 of
the Companies Act, 1956 have been so entered.
b) In our opinion and accordingto the information and explanations given to
us, the transactions made in pursuance of contracts or arrangements entered
into the register in pursuance of section 301 of the Companies Act, 1956
and exceeding the value of rupees five lacs in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
VI. In our opinion and according to the information and explanations given
to us, the company has complied with the provisions of sections 58A and
58AA of the Companies Act, 1956 and the rules framed thereunder, with
regard to deposits accepted from the public. As informed to us no order has
been passed by the Company Law Board, National Tribunal, Reserve Bank of
India or any other Court or Tribunal.
VII. In our opinion the company has an internal audit system commensurate
with its size and the nature of its business.
VIII. We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records have been
prescribed under clause (d) of sub-section (1) of section 209 of the Act
and are of the opinion that the prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether they
are accurate or complete.
IX. a) According to the information and explanations given to us and
according to the books and records have been produced and examined by us,
in our opinion, the company is generally regular in depositing undisputed
statutory dues including provident fund, investor education and protection
fund, employee state insurance, income tax, sales tax, wealth tax, service
tax, VAT, customs duty, excise duty, cess and other statutory dues with the
appropriate authorities during the year. Further no undisputed statutory
dues are outstanding as on March 31, 2008 for a period of more than six
months from the date they became payable.
b) According to the information and explanations given to us, following are
the particulars of disputed dues that have not been deposited:
Nature of Nature Amount A B
statute of dues Rupees
in lacs
Gujarat Sales Tax Sales Tax 27.77 2002-03 Gujarat Sales Tax
Act, 1969 Appellate Tribunal
The Central Excise Duty 1,162.13 2002-03 Commissioner of Central
Excise and Salt Excise
Act, 1944
The Income Income-tax 2.90 Asst. Gujarat High Court
Tax Act, 1961 Year
1988-89
The Income Income-tax 6.45 Asst. Gujarat High Court
Tax Act, 1961 Year
1996-97
The Income Income-tax 2.44 Asst. Commissioner of
Tax Act, 1961 Year Income-tax (Appeals)
2003-04
A = Period to which the amount relates
B = Forum where dispute is pending
X. The accumulated losses of the company exceed the net worth at the end of
the financial year. The company has incurred cash losses during the
financial year covered by our audit as well as immediately proceeding such
financial year.
XI. According to the information and explanations given to us, the company
has defaulted in repayment of dues to banks and financial institutions. The
details of which are as follows:
(Rupee in lacs)
Period of default Principal Interest Total
Within the year under review 3,006.09 283.12 3,289.21
Since prior to the year under review 1,270.00 210.00 1,480.00
Total 4,276.09 493.12 4,769.21
Refer note no.9 of schedule 18 (B) to the balance sheet, regarding
additional liability due to withdrawal of corporate debt restructuring
package.
XII. According to the information and explanations given to us, the company
has not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
XIII. In our opinion the company is not a chit fund, nidhi or mutual
benefit fund/ societies. Therefore, clause 4 (xiii) of the Companies
(Auditors Report) Order, 2003 is not applicable to the company.
XIV. In our opinion and according to the information and explanations given
to us, the company is not a dealer or trader in shares, securities,
debentures and other investments. Therefore, clause 4 (xiv) of the
Companies (Auditors Report) Order, 2003 is not applicable to the company.
XV. According to the information and explanations given to us, in our
opinion, the terms and conditions on which the company has given guarantee
for loan taken by others from banks or financial institutions are not prima
facie prejudicial to the interests of the company.
XVI. The company has not raised any new term loan during the year. The term
loans outstanding at the beginning of the year were applied for the
purposes for which they were raised.
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 a short-term basis which have been used for longterm basis.
XVIII. The company has not made any preferential allotment to parties and
companies covered under register maintained under section 301 of the
Companies Act, 1956 during the year arid hence the question of whether the
price at which the shares have been issued is prejudicial to the interest
of the company does not arise.
XIX. According to the information and explanations given to us and the
records examined by us, no debentures have been issued hence the question
of creating security does not arise.
XX. The company has not raised money by any public issues during the year
and hence the question of disclosure and verification of end use of money
does not arise.
XXI. During the course of our examination of the books and records of the
company, carried out in accordance with the generally accepted auditing
practices in India, and to the best of our knowledge and belief and
according to the information and explanation given to us, no fraud on or by
the company was noticed or reported during the year, nor have been informed
of such case by the management.
For Dhirajlal Shah & Co.
Chartered Accountants
Pravin R. Shah
Place: Ahmedabad Partner
Date : April 30, 2008 Membership no.: 5390