The Ambika Silk Mills Co. Ltd.
AUDITOR'S REPORT TO THE MEMBERS
Report on the Accounts for the year ended 31st March, 1998 in compliance
with section 227(2) of the Companies Act, 1956).
We have audited the attached Balance Sheet of THE AMBIKA SILK MILLS CO.
LTD. as at 31st March 1998 and also the annexed Profit and Loss Account of
the Company for the year ended on that date and report that
As required by the Manufacturing and Other Companies (Auditors Report)
Order 1988 issued by the Central Government in terms of Section 227 (4A) of
the Companies Act 1956 and on the basis of such checks of the books and
records as we considered appropriate, and on the basis of information and
explanations given to us during the normal course of audit, which were
necessary to the best of our knowledge and belief, we enclose herewith a
statement on matters specified in paragraphs 4 and 5 of the said order in
the Annexure I to this report and also further 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, proper Books of Account as required by law have been
kept by the Company, so far as appears from our examination of the Books.
3. The Balance Sheet & Profit and Loss Account dealt with by the Report are
in agreement with the Books of Account.
4. Reference is invited to note No. 6 to Accounts regarding preparation of
the accounts as a `Going concern', despite accumulated losses resulting in
erosion in networth, and the company's ability to continue as a going
concern depending inter alia on the renewal of the sub-lease of the land by
the lessors and the developmental activity proposed to be carried thereon,
as explained by the Company.
5. Subject to our observation in Para 4 above, in our opinion, and to the
best of our information and according to the explanations given to us, the
accounts read together with Significant Accounting Policies, Contingent
Liabilities and other notes thereon, give the information required by the
Companies Act 1956 in the manner so required and further subject to the
following and Annexure I attached hereto:-
(A) Item No. (c) of Contingent Liabilities read with Note No. 3 relating to
claim by workers amount not ascertained.
(B) Item No. (d) of Contingent Liabilities relating to excise duty
liability Rs. 58,963/-
(C) Item No. (e) of Contingent Liabilities relating to Income Tax demands,
disputed in appeals.
(D) Note No. 7.
Relating to non-provision of gratuity liability, amount unascertained.
(E) Note No. 8.
Regarding claim lodged with Insurance Company and position of acceptance or
otherwise of the said claim.
(F) Note No. 9.
Regarding non confirmation of balances.
(G) Note No. 10.
Relating to reconstruction of purchase and creditors ledgers:
Give a true and fair view:
(i) In the case of the Balance Sheet of the state of affairs of the Company
as at 31st March, 1998 and
ii) In the case of the Profit and Loss Account of the `Loss' for the year
ended on that date.
For NANUBHAI & CO.
(ABHAY D. DESAI)
PLACE : MUMBAI
DATE : 27th July, 1998
ANNEXURE TO THE AUDITOR'S REPORT
(Referred to in paragraph 1 of our report of even date on the accounts of
The Ambika Slik Mills Co. Ltd. for the year ended 31st March, 1998).
I. The Company has maintained proper records to show full particulars
including quantitative details and situation of all its fixed assets. The
fixed assets of the company were not physically verified during the year.
In view there of we are unable to comment on discrepancies if any.
II. None of the fixed assets of the company have been revalued during the
III. There were no stocks of stores and spares during the year.
IV. We have been informed that the company has taken interest free
unsecured loans from companies listed in the register maintained under
section 301 of the Companies Act, 1956 and / or from the companies under
the same management as defined under subsection (1B) of section 370 of the
Companies Act, 1956. The terms and conditions of such loans are prima facie
not prejudicial to the interest of the company.
V. The Company has not granted any loans from/to companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act 1956 from/to companies under the same management.
VI. The Company has not granted any loans during the year. In the case of
balance of loan or advance due from ex-employees amounting Rs. 41,339/-
which is considered doubtful of recovery.
VII. The Company has not made any purchase of stores, raw materials, plant
and machinery as also not sold goods (except trading) during the year and
hence the comments on Internal Control Procedures are not required to be
given. As regards purchase of other assets and purchase & sale of traded
goods there exists internal control procedures commensurate with the size
of the company and the nature of its business.
VIII. There are no transactions of sale of trading goods made in pursuance
of contracts or arrangements with parties as listed in the Register
maintained u/s 301 of the Companies Act, 1956.
IX. As there was no stock of trading goods at the year end, the question of
damaged or unservicable stores does not arise.
X. The Company has not accepted any deposits from the public.
XI. During the year there were no transactions involving sale and disposal
of waste or scrap.
XII. During the year under review, there was no internal audit system
prevailing in the company.
XIII. As there is no production activity carried out by the company during
the year, cost records u/s 209(1) (d) of the Companies Act 1956 have not
XIV. According to the records of the company, Provident Fund and Employees
State Insurance dues have generally been regularly deposited during the
year with appropriate authorities. There were no arrears of such dues at
the end of the year.
XV. According to the information and explanation given to us, no undisputed
amounts payable in respect of income tax, sales tax, customs duty were
outstanding as at 31st March 1998 for a period of more than six months from
the date they became payable.
XVI. According to information and explanations given to us, no personal
expenses of employees or directors have been charged to revenue account
other than those payable under contractual obligations or in accordance
with generally accepted business practices.
XVII. The Company is Sick Industrial Company within the meaning of clause
(o) of subsection(1) of section 3 of the Sick Industrial Companies (Special
Provision) Act, 1985. The Company made reference to Board u/s 15(1) to
declare the company as Sick Industrial undertaking and for Revival
Programme, which was rejected by the Board as also the Company's special
appeal before Appellate Authority stands dismissed.
For NANUBHAI & CO.
(ABHAY D. DESAI)
DATE : 27th July, 1998