We have audited the accompanying financial statements of M/S SAMTEX
FASHIONS LIMITED (The Company), which comprise the Balance Sheet as
at March 31,2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (the Act). This responsibility includes
the design, implementa- tion and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial state- ments. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material mis- statement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
ac- counting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b) In the case of the Profit and Loss Account, of the profit/ loss for
the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give that the same is
not applicable to the Company.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were neces- sary for the purpose of
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
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agree- ment with the books
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Ac- counting Standards referred to
in subsection (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
THE ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE OUR REPORT OF EVEN DATE
TO THE MEMBERS OF M/S SAMTEX FASHIONS LIMITED ON THE ACCOUNTS OF THE
COMPANY FOR THE YEAR ENDED 31ST MARCH, 2014
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 accounts.
(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
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 (a) The company has granted loan to parties covered in the register
maintained under section 301 of the companies Act, 1956. (Refer Note
No. 31 (C)).
(b) The above loans and advances are in the nature of interest free
loan and in our opinion the terms and conditions are not, prima facie
prejudicial to the interest of the company.
(c) As explained to us, there is no stipulated time frame for the
repayment of the above loans and advances and hence we are unable to
comment on the regularity of the repayment of the Principal and
Interest on the above loan taken or granted to the parties covered
under section 301 of the Companies Act, 1956.
(d) In view of the above we are unable to comment whether there is any
overdue amounts of loans taken from or granted to the Companies, Firms
or Other Parties listed in the register maintained u/s 301 of the
Companies Act, 1956.
(e) No Loan/advance is reported to be overdue.
(f) The company has not taken any loans and advances, secured or
unsecured from Companies, Firms or Other Parties covered in the
register maintained under section 301 of the companies Act, 1956. Hence
part (e), (f) & (h) of Clause 4(iii) are not applicable.
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) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the particulars
of contracts or arrangements referred to in section 301 of the Act have
been entered in the register required to be maintained under that
(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 (Auditor''s 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. However, It needs to be further
viii. As informed to us maintenance of cost records has been prescribed
by the Central Government under section 209 (1)
(d) of The Companies Act, 1956 is in the process but not shown to us
and management ensures that the compliance report will be submitted
within the time period stipulated in the relevant statute.
ix. (a) As informed to us, and records of the company examined by us,
In our opinion, the company is 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, Service 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 outsta
-nding, as at 31.03.2014 for a period of more than six months from
the date they became payable.
(b) According to the records of the company, the disputed statutory
dues i.e. Income Tax aggregating to Rs. 111.88 lacs that have not been
provided for in the books of accounts on account of matters pending
before concerned appellate authorities/ Delhi High Court and ITAT Delhi
Bench. However a sum of Rs.110.65 lacs is deposited under protest
against above demand. As mentioned in point no. A of Note No. 29 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
investments, 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.73,841 Lacs
(previous year Rs. 59,360 Lacs) & Rs. Nil (previous year Rs.575 Lacs)
against secured Loans taken from financial institutions by SSA
International Ltd. & Sam Buildcon Ltd. Respectively; wholly owned
subsidiaries of the Company.
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 made any
preferential allotment of equity 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
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 AGGARWAL & RAMPAL
Place : New Delhi VINAY AGGARWAL
Dated : May 30, 2014 PARTNER