1. We have audited the attached Balance Sheet of KONARK SYNTHETIC
LIMITED as at 31st March 2011, the Profit & Loss Account and also 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 ouraudit.
2. We conducted our audit in accordance with the 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 presentation of the
financial statements. 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 sub section (4A) of
section 227 of the Companies Act, 1956. We enclose in the Annexure a
statement on the matters specified in paragraphs4& 5 of the said order.
4. Furtherto 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 forthe purpose of
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, the Profit & Loss Account and Cash Flow
Statement dealt with by this report are in agreement with books of
d. In our opinion, the attached Balance Sheet, Profit & Loss Account
and Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956 to the extentapplicable except non provision of
gratuity as referred in note no. 2 of Schedule 17.
e. On the basis of written representations received from the
Directors, as on March 31st, 2011 and taken on record by the Board of
Directors, we report that none of the Directors are disqualified as on
March 31st, 2011 from being appointing as Directors in term of Clause
(g) of Sub-Section (1 )of Section 274 of the Companies Act, 1956.
5. In our opinion and to the best of our information and according to
the explanation given to us, the said accounts read together with
SignificantAccounting Policies and along with Note No. 2 of the Notes
on Accounts regarding non provision of Gratuity as the exact amount of
such provision is not ascertainable due to unavailability of
information required and other 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 case of Balance Sheet of the state of affairs of the Company as
at 31st March2011;
ii. in the case of 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 for the
year ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
Statement referred to in paragraph (3) of the Auditors'' Report of even
date to the Members of KONARK SYNTHETIC LIMITED on the accounts for the
year ended 31st March 2011.
As required by the Companies (Auditors'' Report) Order 2003, issued by
the Company Law Board in terms of Section 227 (4A) of the Companies
Act, 1956, and on the basis of such checks as consider appropriate and
as per the information and explanations given to us during the course
of the audit.
1. In respect of Fixed Assets:
a) The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out by the Company and no
material discrepancies were noticed on such verification. In our
opinion, the frequency of verification is reasonable and adequate in
relation to the size of the Company and nature of its business.
c) In our opinion and according to the information & explanation given
to us, the Company has not disposed off substantial part of fixed
assets during the year and the going concern status of the Company is
2 In respect of Inventories:
a) As per the information furnished, the inventories have been
physically verified during the year by the management. In our opinion,
having regard to the nature and location of stocks, the frequency of
the physical verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, 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.
c) The company has maintained proper records of inventory. In our
opinion, discrepancies noticed on physical verification of stocks were
not material in relation to the operations of the Company and the same
have been properly dealt with in the books of account.
3. a) As informed to us, during the year the Company has given
interest free unsecured loans to its subsidy M/s India Denim
Limited and M/s Konark Infratech Private Limited which covered in the
register maintained u/s 301 of the Companies Act 1956. Details are as
No of Accounts Amount of Loan Given Maximum Outstanding CI. Balance
2 954.37 701.84 252.53
b) Other terms & conditions of the loans given are prima facie not
prejudicial to the interest of the company.
c) In absence of any stipulated term for repayment of principal amount
we are enable comments.
d) There was no overdue amount of 71.00 Lac more than one year as
stipulated if any.
e) As per information furnished, during the year the company has taken
interest free unsecured loans from companies under same management and
the parties covered in the register maintained u/s 301 of The Companies
Act, 1956. Details are as follows:(Amt.inLac)
No. of Accounts Amountof Loan Taken Maximum Outstanding CI. Balance
2 3703.47 1692.07 1298.82
f) Other terms & conditions of the loans taken are prima facie not
prejudicial to the interest of the company.
g) In absence of any stipulated term for repayment of principal amount
weare enable comments.
h) There was no overdue amount of? 1.00 Lac more than one year as
stipulated if any.
4. 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 purchase of inventory and fixed assets and for
the sale of goods. During the course of our audit, we have not observed
any continuing failure to correct majorweakness in internal control
5. In respect of transaction entered in the register maintained in
pursuance of Section 301 of the CompaniesAct, 1956:
i) To the best of our knowledge & belief and according to the
information and explanations given to us, transactions that need to be
entered in the Register have been so entered.
ii) According to the information and explanations given to us, these
contracts or transactions have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. According to the information and explanation given to us, the
company has not accepted any deposits during the year from the public
within the meaning of the provision of the Section 58 A and Section 58
AA of the Companies Act, 1956 and the rules framed there under. Hence
clause 4(vi) of the Order is not applicable.
7. In our opinion, the company has an internal auditsystem
commensurate with the size and nature of its business.
8. The Central Government has prescribed maintenance of the cost
records under section 209(1) (d) of the Companies Act, 1956 in respect
of textile manufacturing activity of the company. We have broadly
reviewed the books of accounts and records maintained by the Company in
this connection and are of the opinion, that prima facie, the
prescribed accounts and records have been made and maintained. We have
not, however carried out examination of the same.
9. According to the information & explanationg iventous in respect of
statutory an do ther dues:
i) The company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education &
Protection Fund, and Employee''s State Insurance, Income Tax, Sales Tax,
Custom Duty, Excise Duty, Cess and any other statutory dues with the
appropriate authorities during the year.
ii) According to the information and explanations given to us, no
undisputed amount payable in respect of the aforesaid dues were
outstanding as at 31 s,March 2011 for a period of more than six months
from the date they became payable.
iii) According to the information and explanation given to us, that
there is no disputed statutory dues outstanding as on 31.03.2011.
10. The Company does not have any accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
11. Based on our audit procedures and on the information and
explanation given by the Management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institutions, banks and debenture holders during the year.
12. In our opinion and according to the explanation given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and othersecurities.
13. In our opinion, the Company is not a chit fund or nidhi / mutual
benefit fund / societies. Therefore clause 4 (xiii) of the Companies
(Auditor report) order, 2003 is not applicable to the Company.
14. During the year the company has not made any dealing or trading in
shares, securities, debentures and other investment.
15. According to the information and explanations given to us, the
Company has given corporate guarantee for loans and Bank Guarantee
taken by subsidiaries from banks orfinancial institution.
16. To the best of our knowledge and belief and according to the
information and explanations given to us, company has not raised any
term loan during the year.
17. According to the information and explanation given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that there are no funds raised on short term basis that have
been used for long term investment.
18. During the year the Company has not made any preferential
allotment of equity shares.
19. During the year covered by our audit report, the Company has not
issued any secured debentures.
20. The Company has not raised any money by public issues during the
year covered by our report.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the year.
For, BHUWANIA&AGRAWAL ASSOCIATES
(Firm Registration No.101483W)
Place: Mumbai PARTNER
Date : 30th May 2011