We have audited the attached Balance Sheet of M/S SAMTEX FASHIONS
LIMITED as at 31st March, 2008, the Profit and Loss Account and the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companys
management. We have expressed 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 required that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. Our audit included
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our audit also included
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 (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 Annexure a statement 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:
1. 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.
2. In our opinion, the company has kept proper books of account as
required by law so far as appears from our examination of the books.
3. The Balance Sheet and Profit and Loss Account and Cash Flow
Statement referred to in this report are in agreement with the books of
account.
4. In our opinion, the Profit & Loss Account and Balance Sheet
generally comply with the accounting standard referred to in
sub-section (3C) of section 211 of the Companies Act, 1956.
5. On the basis of the written representation received from the
directors, as on 31st March, 2008, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31-03-2008 from being appointed as a director in terms of clause (g)of
sub-section (1) of section 274 of the Companies Act, 1956.
6. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the 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, Subject to Note No.
A 11 (b) of Accounting Policies regarding method of valuation of
Gratuity and leave encashment, as the same has been quantified provided
for by the management, on which we have relied.
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March, 2008 and
ii) In the case of the Profit and Loss Account, of the Profit for the
year ended on that date.
iii) In case of the Cash Flow Statement of Cash Flow for the year ended
on that date.
ANNEXURE REFERRED TO IN OUR AUDIT REPORT OF EVEN DATE OF M/S SAMTEX
FASHIONS LIMITED PURSUANT TO THE COMPANIES (AUDITORS REPORT) ORDER
2003:-
i. (a) In our opinion and as per information and explanation provided
to us the company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us the fixed assets have been physically verified
by the management during the year and as per the explanations and
information given to us there is a regular program of verification
which, in our opinion, is reasonable having regard to the size of the
company and the nature of its assets. As explained to us discrepancies
noticed on physical verification were not significant and have been
properly dealt with in the books of account.
(c) During the year, the company has not disposed off any part of the
plant and machinery, which will have the effect on the Going concern of
the company.
ii. (a) As explained to us the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to information and explanations given
to us the procedures of physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the company and the nature of its business.
(c) As explained and based on the information given to us, we are of
the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material and the same has
been properly dealt with in the books of account.
iii The company has not taken loan from any other companies covered in
the register maintained under section 301 of the companies Act, 1956,
and the company has not given loan to any other party covered in the
register maintained under section 301 of the Companies Act. 1956, and
thus provisions of Para 3(b), (c) and, (d) of the order are not
applicable to the company.
iv In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of company and the nature of its business
with regard to, purchase of stores and spares, raw materials, fixed
assets, and with regard to the sale of goods. During the course of our
audit, no major weakness has been noticed in such internal controls.
v. (a) According to the information and explanations provided by the
management, we are of the opinion that there were no transactions that
need to be entered in the register maintained under section 301.
(b) 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 registers maintained under section 301 and
exceeding the value of five lakhs 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 times.
vi. In our opinion and according to the information and explanations
given to us, the company has not accepted any Deposits as defined with
in the meaning of Sections 58A and 58AA of the companies Act, 1956 and
the companies (Acceptance of Deposits) Rules 1975 and hence the
provisions of clause 4(vi) of the Companies (Auditors Report)
Order,2003 are not applicable to the Company
vii. Internal Audit has been conducted by an independent firm of
Chartered Accountants during the year and it is commensurate with the
size and nature of Business.
viii. As informed to us maintenance of cost records has not been
prescribed by the Central Government under section 209 (1)(d) of the
Companies act, 1956.
ix. (a) The company is generally been regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education protection fund, employees state insurance,
income tax, sales tax, wealth tax, custom duty, excise-duty, cess and
other statutory dues applicable to it and as informed and explained to
us, no undisputed amounts payable in respect of income tax, wealth tax,
sales tax, custom duty and excise duty were outstanding, as at
31.03.2008 for a period of more than six months from the date they
became payable.
(b) According to the records of company, the disputed statutory dues
i.e, Income Tax aggregating to Rs. 67.93 lacs that have not been
provided for in the books of accounts on account of matters pending
before concerned appellate authorities/ Delhi High Court. However a sum
of Rs.65.20 lacs is deposited under protest against above demand. As
mentioned in point no. B 2. of other notes of Schedule XXI pertaining
to Notes on Account.
x. The company does not have any accumulated losses. Further it has not
incurred any cash losses during the financial year covered by our audit
and in the immediately preceding financial year.
xi. As explained and informed to us by the management, we are of the
opinion that the company has not defaulted in repayment of dues to any
financial institution, or bank .
xii. Based on the records we report that the company has not granted
any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. The company is not a chit fund company or mutual fund / Society,
thus the provisions of this para are not applicable.
xiv. As per records of the company and the information and explanations
given to us by the management, The Company is not dealing or trading in
shares, securities, and debentures and other investment except those
investment, which are held as investment. In our opinion , in respect
of those investments held by the Company, proper records have been
maintained of the transactions and contracts and timely entries have
been made therein and the shares, securities and other investments have
been held by the Company ,in its own name.
xv. According to the information and explanations provided to us by the
management, the company has guaranteed a sum of Rs. 16978 Lacs against
secured loans taken from financial institutions/Banks by its wholly
owned subsidiary Company i.e, SSA International Limited.
xvi. The term loans obtained by the company have been applied for the
purpose for which they were raised.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment. No long-term funds have been used to finance short-term
assets except core (permanent) working capital.
xviii. As explained and informed to us by the management and upon our
examination of records we report that the company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained under section 301 of the Act.
xix. During the period covered by our audit report, the company has not
issued any types of debentures. The question of creation of any
security in the respect of debentures does not arise.
xx. During the financial year the company did not raise any money by
public issue.
xxi. In our opinion and according to information and explanations given
to us by the management, there was no fraud on or by the company which
has been noticed and reported during the year, that causes the
financial statements to be materially misstated.
For VINAY AGGARWAL & ASSOCIATES
CHARTERED ACCOUNTANTS
Sa/-
Place : New Delhi VINAY AGGARWAL
Dated : 23.08.2008 PARTNER
M. No. 82045
