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Konark Synthetics Ltd.

BSE: 514128 | NSE: | Series: NA | ISIN: INE517D01019 | SECTOR: Textiles - Processing

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Konark Synthetics is not listed on NSE

Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Auditor's Report

1. We have audited the attached Balance Sheet of Konark Synthetic Limited (the Company) as at 31st March, 2012, and the related Statement Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. 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.

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 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 (CARO), and as amended by the Companies (Auditors' Report) (Amendment) Order, 2004 (together the Order), issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to 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 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 those books;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the attached Balance Sheet, Statement of Profit and Loss dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) ofthe Companies Act, 1956 to the extent applicable except for the non provision of Gratuity as referred in note no. 26 of notes on account.

e) On the basis of written representations received from the Directors, as on 31stMarch, 2012 and taken on record by Board of Directors, none ofthe Directors are disqualified as on 31st March, 2012from being appointed as Directors in term of clause (g) of sub-section (1) of Section 274 ofthe 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 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 principle generally accepted in India:

i. In the case of Balance Sheet ofthe state of affairs ofthe Company as at 31st March, 2012;

ii. In the case of the Statement of Profit and Loss of the Profits for the year ended on that date and

Hi. In the case ofthe Cash Flow Statement, ofthe cash flows ofthe Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date to the members of Konark Synthetic Limited on the accounts for the year ended 31st March, 2012)

i. In respect of the Fixed Assets,

a) The company has maintained proper records showing full particulars, including quantitative details and situations 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, having regard to the size of the Company and nature of its business.

c) No substantial part of fixed assets has been disposed off during the year under review, which could affect the going concern status of the company.

ii. In respect of the 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.

iii. a) In respect of loans granted, secured or unsecured, to the companies, firms or other parties, which are its subsidiaries, covered in the Register maintained under section 301 of the Companies Act, 1956, we report as per the information and explanations provided to us, that, there are three parties to whom interest free unsecured loans have been given and total amount of such loan given was Rs. 1389.81 Lacs during the year. Details of the same are provided as under:

(Rs. in Lac)

No. of Parties Relationship with Company Loan Given Closing Balance

3 Subsidiaries 1389.80 1172.69

b) In our opinion, other terms and conditions of loans given by the companies are prima facie not prejudicial to the interest of the company.

c) In the absence of any stipulated term for repayment of principal amount we are unable to comment on whether the payment of the principal amount is regular.

d) As stated above in the absence of any stipulated term for repayment of principal amount, we are unable to comment on whether there has been any overdue amount of Rs. One Lac for more than one year.

e) In respect of loans taken, secured or unsecured, from the companies, firms or other parties covered in Register maintained under Section 301 of Companies Act, 1956, we report as per the information and explanations provided to us, that, there is one party from whom interest free unsecured loans has been taken, details of the which has been given below:

(Rs. in Lac)

No.of Parties Relationship with Company Loan Given Closing Balance

1 Associate Concern 1068.37 2108.71

f) In our opinion and according to the information and explanations given to us other terms and conditions of above loan taken is prima facie not prejudicial to the interest of the company.

g) In absence of any stipulated term for repayment of principal amount we are unable to comment on whether the principal amount is due for repayment.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size ofthe Company and the nature of its business with regard to purchase of fixed assets. The Company has not started its operations and therefore internal control in respect of purchase of inventory and sale of goods and services does not arise. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal control system.

v. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we report that the transactions that need to be entered into a register in pursuance of section 301 of the Act, have been so entered.

b) In our opinion and according to the information and explanations give to us, the transactions made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 and exceeding the value of five lacs rupees 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. According to the information and explanations given to us, the Company has not accepted any deposits during the year from the public, within the meaning of the provisions of Sections 58A and 58AA of the Companies Act, 1956 and rules made there under. Therefore, the provisions of clause (vi) of paragraph 4 ofthe said Order are not applicable to the Company.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

viii. 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, however, not made a detailed examination ofthe records with a view to determining whether they are accurate or complete.

ix. a) According to the information and explanations given to us and the records examined by us, the company has been regular in depositing with appropriate authorities undisputed statutory dues including Income Tax, Provident Fund, Sales Tax and any other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

b) According to the records ofthe Company, and information and explanations given to us there are no dues of Income tax / Sales Tax/ Wealth Tax/ Service Tax/ Custom Duty/ Excise Duty/ Cess which has not been deposited on account of disputes.

x. There are no accumulated losses ofthe Company as on 31st March, 2012. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. As per the information and explanations given to us and based on our audit, the Company has not defaulted in repayment of dues to financial institution or bank.

xii. Based on our examination of the records and the information given to us, the Company has not granted any loans and/or advances on the basis of security byway of pledge of shares, debentures and other securities. Therefore, the provisions of clause (xii) of paragraph 4 ofthe said Order are not applicable to the Company.

xiii. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 ofthe said Order are not applicable to the Company.

xiv. Based on our examination ofthe records and the information given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. Therefore, the provisions of clause (xiv) of paragraph 4 ofthe said Order are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has given corporate guarantees to the banks for loans taken by one of its subsidiary, amounting to Rs. 2706.00 Lac. In our opinion and as per the information and explanations given, terms and conditions of these corporate guarantees are not prejudicial to the interest ofthe Company.

xvi. The company has not taken any term loans during the year. Therefore, the provisions of clause (xvi) of paragraph 4 ofthe said Order are not applicable to the Company.

xvii. In our opinion and according to information and explanations made available to us, no short term funds have been utilized for long term purposes during the year.

xviii. During the year, the Company has not made any preferential allotment of shares to the parties and companies covered in the Register maintained under Section 301 ofthe Companies Act, 1956.

xix. The Company has not issued any debentures. Therefore, the provisions of clause (xix) of paragraph 4 of the said Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the year covered by our report. Therefore, the provisions of clause (xx) of paragraph 4 ofthe said Order are not applicable to the Company.

xxi. Based on our audit procedures performed for the purpose of reporting the true and fair view of financial statements and as per the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Bhuwania & Agrawal Associates

Chartered Accountants

(Firm Registration No. 101483W)

Abhishek Jain

Place: Mumbai Partner

Date : 30th May 2012 Membership No. 509839