| We have audited the attached Balance Sheet of BAFNA SPINNING MILLS &
EXPORTS LIMITED, as at 31st March, 2012 together with the Profit & 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.
We conducted out 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 check 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.
As required by the Companies (Auditor's Report) Order, 2003, issued by
the Central Government of India in terms of the Section 227 (4A) of the
Companies Act, 1956, we give in the annexure a statement on the matters
specified in paragraph 4 & 5 of the said order.
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 it appears from our examination of
books of accounts.
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, Profit & Loss Account and Cash
Flow statement dealt with this report are in compliance 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 31st March, 2012 and taken on records by the Board of Directors,
we report that none of the directors of the company are disqualified
from being appointed as directors of the company under clause (g) of
sub-section (1) of section 274 of the companies Act, 1956.
f. In our opinion and to the best of our information and according to
the explanation given to us, the said accounts read together with the
Significant Accounting Policy and Notes thereto give the information
required by the Companies Act, 1956, in the manner so required and give
a true & fair view in conformity with the accounting principles
generally accepted in India;.
(T) In the case of the Balance Sheet, of the state of affairs of the
company as on 31st March, 2012;
(ii) In the case of the statement of Profit & Loss, Accounts of the
Loss 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 REFERRED TO IN PARAGRAPH 3 OF OUR AUDITORS REPORT OF
EVEN DATE OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st
MARCH. 2012
On the basis of such checks as we considered appropriate and the terms
of the information and explanations given to us, we state that:
1. (a) The Company has maintained proper records showing full
particulars
including quantitative and situation of fixed assets.
(b) As explained to us fixed assets are physically verified by the
management at reasonable intervals in a phased verification program,
which in our opinion is reasonable looking to the size of the company
and the nature of its business.
(c) In our opinion, the company has not disposed off any substantial
part of its fixed assets so as to effect in it going concern.
2. The Company does not hold any stocks of finished goods, stores,
spare parts, work-in-progress or raw materials. Hence the question of
physical verification, reconciliation, maintenance or records,
discrepancies or valuation does not arise.
3. In respect of 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 taken loans from Mr. SR Bafna, the Managing
Director of the Company in the year 2009-10. The Maximum amount
involved was Rs. 7,82,162/- and the outstanding balance at the end of
the year is Rs. 7,82,162/-. The Company has not granted any loans to
the parties covered In the register required to be maintained u/s 301
of the Companies Act, 1956.
(b) No interest is charged for the above loan taken.
(c) There is no stipulated repayment schedule for the above loan.
4. In our opinion and according to the information and given to us,
there are adequate internal control procedures commensurate with the
size of company and the nature of its business with regard to purchase
of fixed assets and other stock in trade. During the course of audit,
no major weakness in internal control had come to notice. Ý
5. (a) On the basis of the audit procedure performed by us, and
according to the
information and explanations given and representations given to us, we
are of the opinion that, there were no transactions in which directors
were interested as contemplated under Section 297 and sub- section (6)
of Section 299 of the Companies Act, 1956 and so question of making
entries in the register maintained under Section 301 of the said Act,
does not arise.
(b) In our opinion and according to the information and explanations
given to us, there were no transactions made in pursuance of contracts
or arrangements exceeding the value of rupees five lacs during the
year, so the question of making entries in the Register maintained u/s
301, do not arise.
6. The company has not accepted any deposit from public cover u/s 58A,
58AA or any other relevant provisions of the Companies Act 1956 read
along with companies (Acceptance of deposits) rules 1973 and the
directive issued by the Reserve Bank of India.
7. The Company has no separate Internal audit system during the year
under audit.
8. The Central Government has not prescribed maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 for any of
the products of the company.
9. According to the information and explanations given to us no
disputed amounts payable in respect of Income Tax, Sales tax. Custom
duty and Excise duty were outstanding as at 31st March, 2012 except the
following:
Name of the Nature of Amount (Rs.)
Statute Dues
Income Tax Income Tax 1,81,010/-
Act, 1961 with Interest
Income Tax Advance Tax 10,41,301.35
Act, 1961
Income Tax Advance Tax 9,88,864.82
Act, 1961
Name Period to
which Due Date Date of
the amount Payment
relates
Income Tax A.Y. 2008-09 30/09/2008 Outstanding
Income Tax A.Y. 2009-10 30/09/2009 Outstanding
Income Tax A.Y. 2010-11 30/09/2010 Outstanding
10. The Company has neither accumulated losses nor incurred cash
losses at the end of the financial year and in the immediately
preceding year.
11. As the Company has not obtained any loans from financial
institutions, the question of default in repayment of dues does not
arise.
12. As examined to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures, or any other securities.
13. In our opinion, the company is not a chit fund or a nidhi fund /
mutual benefit fund / society. Therefore, clause 4(xiii) of the
Companies (Auditor's Report order 2003 is not applicable.
14. In our opinion and according to the information and explanation
given to us, the Company is not dealing in or trading is respect of
shares, securities debentures and other investments. According to the
provision of clause 4 (xiv) of the companies (Auditor Report) order
2003 are not applicable to the company.
15. According to the information and explanation given to us, and the
representations made by the management, the Company has not given any
guarantee for loans taken by others from any bank or financial
institution.
16. The company has not raised any term loan during the year under
review.
17. According to the information and explanation given to us and on
overall examination of the financial statements of the company and
after placing reliance on the reasonable assumption made by the company
for classification of long term and short term usage's of funds, we are
of the opinion that, prima-facie, long term funds have not been
utilized for short term purposes.
18. The company has not made any issue of shares during the year under
audit. Hence the question of preferential allotment of shares to
parties and companies covered in the register mentioned under section
301 does not arise.
19. The Company has not issued any debentures.
20. The Company has not issued any money by way of public issue,
during the year.
21. According to the information and explanation given to us, and to
the best of our knowledge and benefit, no fraud on or by the Company,
has been noticed or by the company, during the year that clauses the
financial statements to be materially misstated.
PLACE: COIMBATORE FOR AND ON BEHALF OF THE BOARD
DATE : 01/09/2012
Sd/-
CHAIRMAN | 