| We have audited the attached Balance Sheet of GLOBAL KNITFAB LIMITED,
as at 31st March, 2011 and also the Profit and Loss Account 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 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.
As required by the Companies (Auditor's Report) Order, 2003 and as
amended by the companies (Auditor's Report) (Amendment) Order, 2004
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
on the matters specified in paragraphs 4 and 5 of the said order.
Further to our comments in the Annexure referred to above, we report
that:-
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination or
those books.
iii) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt
with by this report comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956.
v) On the basis of written representations received from the directors,
as on 31st March, 2010and 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 clause (g) of
sub-section (1) of section 274 on the Companies Act, 1956;
vi) In Our opinion and to the best of our information and according to
the explanations given to us, subject to notes on accounts, the said
accounts give this 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 Balance Sheet, of the state of affairs of the company
as at 31st March, 2011; and
b) in the case of the Profit and Loss Account, of the profit/loss for
the year ended on that date.
ANNEXURE
The Auditor's Report on the account of a company to which this Order
applied shall include a statement in the following matters, namely:
i) a) The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) In our opinion the fixed assets have been physically verified by the
management at reasonable intervals; having regards to the size of the
company and the nature of its assets. No material discrepancies between
the books records and the physical inventory were noticed.
c) During the year, in our opinion a substantial part of fixed assets
has not been disposed of by the company.
ii) a) The physical verification of inventory has been conducted at
reasonable intervals by the management.
b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to size of the
company in nature of the business.
c) The company maintaining the proper record of inventory and no
material discrepancies were noticed on physical verification.
iii) a) The company has neither granted nor taken any loans, secured or
unsecured, from companies, firm or other parties listed in the register
maintained u/s 301 of the Companies Act, 1956.except from Kamlesh Gupta
and amount outstanding to her account is Rs.8,98,826 as on 31/03/2011.
b) The rate of interest and other terms and condition of the loans
taken by company are prima facie prejudicial to the interest of the
company.
c) Yes principal amount and interest on loan taken by the company from
Kamlesh Gupta is regular.
d) There is no overdue amount.
iv) In our opinion and according to the information and explanation
given to us there is adequate internal control procedure commensurate
with the size of the company and the nature of its business for the
purpose of inventory, fixed assets and for the sale of goods. Further,
on the basis of our examination, and according to the information and
explanation given to us, we have neither come across nor have we been
informed of any instance of major weaknesses in the aforesaid internal
control procedure.
v) a) According to the information and explanation given to us, we are
of the opinion that the transactions that need to be entered into the
register maintain under section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5.00 Lakhs 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 explanation
given to us, the company has complied to the provisions of section 58A
and 58AA of the Companies Act, 1956, and the companies (acceptance of
deposit) rules, 1975 as applicable except unsecured loan of
Rs.8,98,826/- from Mrs. Kamlesh Gupta with regards to the deposits
accepted from the public. As per information and explanation given to
us no order under the aforesaid section has been passed by the company
law board on the company.
vii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
viii) To the best of our knowledge, the Central Government has not
prescribed the maintenance of cost records under section 209 (1) (d) of
the Companies Act, 1956, for any of the products of the company
accepting paper for which in our opinion, prima facie, the prescribed
accounts and records have been maintained and are being made up. We
are not required to and, accordingly, have not made a detailed
examination of the records.
ix) a) According to the information and explanation given to us and
according to the books and records as produced and examined by us, in
our opinion, the company is regular in depositing undisputed statutory
dues including, investor education and protection fund employees' state
insurance, income tax, sales tax, wealth tax, custom duty, excise duty,
cess and other material statutory dues as application with the
appropriate authorities Except ESI of Rs.2090/- and ESI interest of Rs.
65,687/- has not been paid till date.
b) As at 31st March, 2011 according to the records of the company and
the information and explanation given to us the following are the
particular of dues on account sales tax, income tax, custom duty,
wealth tax, excise duty and cess matters that have not been deposited:
Name of the Name of Amounts Forum where pending
Statute the Dues (in Lakhs)
ESI ESI 0.02 Employee's state insurance
Interest ESI 0.66 ESI
x) The company has incurred Loss to the tune of Rs.9,92,16,821/- before
provision for Taxation during the financial year. The company has been
registered with the Board of industrial and financial construction of
India as Sick Company under the Sick Industrial Companies (Special
Provisions) act, 1985 vide case no. 470/2002. Its accumulated loses at
the end of financial year 2001-02 were more than its net worth.
xi) According to the information and explanation given to us, the
company has defaulted in payment of dues of IDBI & Punjab & Sind Bank.
Total outstanding amount of IDBI is Rs.48.13 Crore including interest
since September- 1999 and Punjab & Sind Bank is Rs. 10.30 Crore
including interest since march-2001.
xii) According to the information and explanation given to us, the
company has not granted any loans and advance on the basis of security
by way of pledge of shares, debentures and other securities.
xiii) The provisions of any special statute as specified under
paragraph, of the order are not applicable to company.
xiv) The company is not dealing or trading in Shares, Securities,
Debentures and other investments.
xv) According to the information and explanation given to us, the
company has not given any guarantees for loans taken by others from
banks and financial institutions.
xvi) The company has not taken any terms loan during the year.
xvii) Based on the information and explanation given to us, and on an
overall examination of the Balance Sheet of the company, in our
opinion, there are no funds raised on a short term basis which have
been used for long term investment and vice versa
xviii) According to the information and explanations given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the Register maintained Under Section 301 of the
Companies Act, 1956, during the year. In our opinion, the price at
which shares have been issued is not prejudicial to the interest of the
company.
xix) No securities have been created in respect of debentures, since no
debentures have been issued.
xx) The company has not raised any money by public issue during the
year.
xxi) According to the information and explanation given to us, during
the year, there was no fraud on the company or by the company.
for K J M A & ASSOCIATES
CHARTERED ACCOUNTANTS
DATED : 07/09/2011 (KRISHAN JUNEJA-FCA)
PLACE : CHANDIGARH PARTNER
M. No. 089484 | 