1. We have audited the attached Balance Sheet of JANICE TEXTILES
LIMITED as at 31st March, 2003, the Profit & Loss account for the year
ended on that date annexed thereto and the Cash Flow Statement for the
year ended on that date. These financial statements are the
responsibility of the 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 test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assesssing 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 Manufacturing and other Companies (Auditor's
Report) Order, 1988 issued by the Company Law Board in terms 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. Attention is invited to :
a) Note no. 8 of schedule P regarding preparation of accounts on going
b) Note no. 9 of schedule P regarding non provision of doubtful debtors
of Rs. 37,16,36V- for reasons stated in the said note.
5) Further to our comments in the Annexure referred to in paragraph 3,
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
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
c. The Balance Sheet, Profit & Loss Account and the 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 the
Cash Flow Statement dealt with by this report comply with the
accounting standards referred ot in sub-section (3C) of Section 211 of
the Companies Act, 1956.
e. On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that none of
the said directors are disqualified as on 31st March, 2003 from being
appointed as directors in terms of 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 explanations given to us, subject to what is stated in paragraph 4
above, the said accounts 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 2003;
ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2003 OF JANICE TEXTILES LIMITED
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us, we state that :
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of the Fixed Assets. As
explained to us, all the assets have been physically verified by the
management during the year. No material discrepancies have been noticed
on such physical verification as compared to the books records.
2. None of the Fixed Assets have been revalued during the year.
3. The manufacturing operations of the Company have remained suspended
through out the year. The Company has maintained no inventory other
than the opening stock which has physically verified and valued on the
same basis as the preceding year.
4. The Company taken loans from companies, firms or other parties
listed in the register maintained under Section 301 of the Companies
Act, 1956 and the same are prima facie not prejudicial to the interest
of the Company. We are informed that there are no companies under the
same management as defined under sub-section (1B) of Section 370 of the
Companies Act, 1956.
5. The Company has not granted any loans, secured or unsecured to
companies, firms or other parties listed in the register maintained
under Section 301. We are informed that there are no companies under
the same management as defined under sub-section (1B) of section 370 of
the Companies Act, 1956.
6. The Company has not given any interest free loans and advances in
nature of loans.
7. In our opinion and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of stores, raw materials includig components,
plant and machinery, equipment and other assets and for the sale of
8. In our opinion and according to the information and explanations
given to us, the Company has not entered into any transactions for
puchase of goods and material and sale of goods, materials and services
with parties in pursuance of contracts or arrangements which are to be
entered in the registers maintained under section 301 of the Companies
Act, 1956 and aggregating during the period to Rs. 50,000/- or more in
respect of each party.
9. As explained to us, the Company has a regular procedure for
determination of unserviceable or damaged stores, raw materials and
finished goods. Adequate provision has been made in the accounts for
the loss arising on the items so determined.
10. The Company has not accepted any deposits within the meaning of
Section 58 A of the Companies Act, 1956, from the public.
11. In absence of manufacturing operation no scrap has generated during
12. The Company did not have a formal internal audit system during the
year. However, the management is exercising due checks and controls to
take care of the same.
13. In absence of any manufacturing operation cost records, have not
been maintained by the Company.
14. We are informed that the Company was not required to deduct and
deposit contributions under Provident Fund Act during the year. We are
informed that the Employees State Insurance Act, 1948 is not applicable
to the Company.
15. There are no undisputed amounts payable in respect of Income Tax,
Wealth Tax, Sales Tax, Customs Duty and Excise Duty as at 31st March,
2003 which are outstanding for a period of more than six months from
the date they became payable.
16. According to the information and explanation given to us and the
records examined by us, no personal expenses have been charged to
revenue account, other than those payable under contractual obligations
or in accordance with generally accepted business practice.
17. Consequent upon the net worth of the Company becoming negative as
at 31st March 2002, the Company has become a Sick Industrial Company
within the meaning of Clause (o) of Sub-section(l) of Section (3) of
the Sick Industrial Companies (Special Provisions) Act, 1985. During
the year the Company has made reference to Board of Industrial &
FOR AND ON BEHALF OF
V. PAREKH & ASSOCIATES
DATED : 11th July, 2003 RASESH V. PAREKH, PARTNER