We have audited the attached Balance Sheet of GANESH POLYTEX LIMITED as
at 31st March, 2008 and the Profit & Loss Account for the year ended on
that date annexed thereto and 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.
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
disclosure 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.
01 As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government of India in terms of subsection (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure
hereto a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
02 Further to our comments in the Annexure referred to In paragraph 1
above, we report that:-
(a) We have obtained all the Information & 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, have
been kept by the company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit & Loss Account 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 and Loss account and Cash
Flow Statement dealt with by this report, comply with the Accounting
Standards referred to in sub- section (3 C) of section 211 of the
Companies Act, 1956, to the extent applicable;
(e) On the basis of written representations received from the Directors
of the Company, as on 31 st March , 2008 and taken on record by the
Board of Directors, we report that none of the Directors is
disqualified as on 31st March, 2008 from being appointed as a Director
in terms of clause (g) of subsection (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, the said Accounts 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
:-
(i) in the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2008 ;
(ii) in the case of the Profit & Loss Account, of the Profit 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.
(1) (i) The Company has maintained proper records showing full
particulars including quantitative details & situation of fixed assets.
(ii) As explained to us, the fixed assets have been physically verified
by the management during the year under regular program of
verification, which in our opinion, is reasonable having regard to the
size of the Company & nature of its assets. As informed to us, no
material discrepancies were noticed on such verification.
(iii) There was no substantial disposal of fixed assets during the
year.
(2) (i) As explained to us, inventory has been physically verified by
the management at reasonable intervals during the year.
(ii) 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 nature of its business.
(iii) On the basis of our examination of inventory records, we are of
the opinion that the Company is maintaining proper records of
inventory. As explained to us, there were no material discrepancies
noticed on physical verification of inventory as compared to the book
records.
(3) (i) According to the information and explanations given to us, 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. Accordingly, paragraphs 4 (iii) (a),
(b), (c) and (d) of the Order, are not applicable to the Company.
(ii) According to the information and explanations given to us, the
Company has taken Unsecured loans and fixed deposits from a Company,
three directors and two other parties covered in the register
maintained under section 301 of the Companies Act 1956. During the year
Rs. 73.25 lakhs were taken as loan and the maximum amount involved
during the year was Rs. 90.66 lakhs and the balance outstanding as on
31st March 2008 is Rs. 67.95 Lakhs.
(iii) In our opinion and according to the information and explanations
giver to us, the rate of interest & other terms and conditions of such
loans taken by the Company are not prima facie prejudicial to the
interest c the Company.
(iv) In respect of unsecured loans taken by the Company, principal
amour is repayable on demand and there are no stipulations as to the
payment of principal amount & interest thereon. In respect of fixed
deposit taken by the Company, payment of principal amount & interest
regular.
(4) In our opinion and according to the information and explanations
given to there is an adequate internal control system commensurate with
the size the Company and the nature of its business ,for the purchase
of and fixed assets and for the sale of goods and services. During the
Course of our audit, no major weakness has been noticed in the internal
control systems in respect of these areas.
(5) (i) According to the information and explanations given to us, we
are the opinion that the particulars of contracts or arrangements
referred in section 301 of the Act that need to be entered into the
register maintained under section 301 have been so entered.
(ii) In our opinion and according to the information and explanations
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 Rupees five 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.
(6) In our opinion and according to the information and explanations
given to us, the Company has generally complied with the provisions of
Section 58A and 58AA or any other relevant provisions of the Companies
Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with
regard to the deposits accepted from the public. No order has been
passed by the Company Law Board or any Court or any other Tribunal.
(7) In our opinion, the Company has an internal audit system
commensurate with the size & nature of its business.
(8) The Central Government has prescribed maintenance of Cost Records
under section 209(1) (d) of the Companies Act, 1956 in respect of
certain manufacturing activities of the Company. We have broadly
reviewed the accounts and records of the Company in this connection and
are of the opinion, that prima facie, the prescribed accounts and
records have been made & maintained. We have not, however made a
detailed examination of the same.
(9) (i) According to the information & explanations given to us and the
records of the Company examined by us, in our opinion, undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
material statutory dues have generally been regularly deposited with
the appropriate authorities though there have been a slight delay in a
few cases.
(ii) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees state insurance, income tax,
wealth tax, service tax, sales tax, custom duty, excise duty , cess and
other undisputed statutory dues were outstanding, as at 31st March,
2008 for , a period of more than six months from the date they became
payable.
(iii) According to the records of the Company and as per the
information and explanations given to us, the disputed statutory dues
as at 31 March, 2008 that have not been deposited on account of
matters pending before appropriate authorities are as under:
Name of the Statute Nature of the Dues Amount
(Rs. in Lacs)
U. P. Trade Tax Act, 1948 U. P. Trade Tax 0.58
U. P. Trade Tax Act, 1948 U. P. Trade Tax 0.72
U. P. Trade Tax Act, 1948 U. P. Trade Tax 0.19
U. P. Trade Tax Act, 1948 U.P Trade Tax 4.41
U. P. Trade Tax Act, 1948 Entry Tax 2.34
U.P Trade Tax Act, 1948 Entry Tax 11.99
Custom Act, 1962 Custom Duty & Penalty 5.79
Income Tax Act, 1961 Income Tax 9.35
Forum where dispute is
pending
Trade Tax Tribunal, Kanpur
Trade Tax Tribunal, Kanpur
Trade Tax Tribunal, Kanpur
Trade Tax Tribunal, Kanpur
Appeal-Joint Commissioner,
Kanpur
Appeal Joint Commissioner,
Kanpur
CESTAT, New Delhi
Commissioner of Income Tax
(Appeals), Kanpur
(10) The Company has no accumulated losses at the end of the financial
year ended on 31 March, 2008 and it has not incurred any cash losses
during the financial year ended on 31 March, 2008 and in the
immediately preceding financial year ended on 31 March, 2007.
(11) According to the practices followed by the bankers of the Company,
term loan installments and interest are recovered by way of transfer
from the working capital accounts of the Company maintained with them
and sometimes, these dues have been recovered with a slight delay from
the due date. In view of the above, and according to the information
and explanations given to us, the Company has not defaulted in
repayment of dues to financial institutions, banks and debenture
holders.
(12) In our opinion and according to the information and explanations
given to us the Company has not granted loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(13) In our opinion, the Company is not a Chit fund or nidhi / mutual
benefit fund/ society. Therefore clause 4(xiii) of the Companies
(Auditors Report) Order, 2003 is not applicable to the Company.
(14) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Therefore clause 4 (xiv)
of the Companies (Auditors Report) Order, 2003 is not applicable to
the Company.
(15) In our opinion and according to the information & explanations
given to us, the Company has not given any guarantee for loans taken by
others from Bank or financial institutions. Therefore clause 4(xv) of
the Companies (Auditors Report) Order, 2003 is not applicable to the
Company.
(16) Based on information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
(17) According to the information & explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that no funds raised on short-term basis have been used for
long-term investments.
(18) During the year the Company has made preferential allotment of
Equity shares to the two directors covered in the Register maintained
under section 301 of the Companies Act, 1956. Further, the Company has
also made preferential allotment of Preference shares to the three
directors & thirteen other parties covered in the Register maintained
under section 301 of the Companies Act, 1956. In our opinion, prices at
which shares have been issued, are not prejudicial to the interest of
the Company.
(19) The Company has not issued any debentures during the year.
(20) The Company has not raised any money by way of public issue during
the year.
(21) Based upon the audit procedures performed for the purpose of
reporting true and fair view of the financial statements and according
to the information and explanations given to us by the management, in
our opinion, no fraud on or by the Company has been noticed or reported
during the course of our audit.
For MEHROTRA RAKESH KUMAR & CO.
Chartered Accountants
DEEPAK SETH
Place : Kanpur Partner
Date : 19th June, 2008 Membership No. 73081
