EMTEX INDUSTRIES (INDIA) LIMITED
ANNUAL REPORT 2010-2011
The Members of
Emtex Industries (India) Ltd.
We have audited the attached Balance Sheet of Emtex Industries (India) Ltd,
as at 31st March 2011 and also 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. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We have 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 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 the ANNEXURE a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
1. Further to our comments in the ANNEXURE referred to above, we report
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
(ii) 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 books,
except the cost accounting records required under section 209 (1) (d) of
the Companies Act 1956.
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
Account dealt with by this report are in agreement with the books of
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the Companies
Act, 1956 except Accounting Standard - 15 on Accounting for Retirement
benefits in the Financial Statements of Employers with regards to provision
of gratuity and leave encashment and Accounting Standard - 11 on Accounting
for Effects of Changes in Foreign Exchange Rates. (Refer Note 5 of Schedule
1) The company doesnt have a whole time Company Secretary as on date as
required under section 383-A of the Companies Act, 1956.
2) Export related receivables have not been revalued at the exchange rate
prevailing at the end of the year in accordance with the Accounting
standard 11 issued by the institute of chartered accountants of India and
accordingly the debtors are overstated by Rs. 2.29 lacs (Previous year
Rs.1.22 lacs) and creditors are overstated by Rs.1.02 lacs and thereby loss
is understated to the extent of Rs. 1.27 lacs (Previous year Rs. 1.22 lacs)
refer note 5 of schedule XII.
3) The companies has not accounted and not worked out for interest payable
on the borrowed amount during the year under consideration.
4) The company has not redeemed the Debentures and also not created
Debenture Redemption Reserve till 31st March, 2011. (Refer Note 6 of
5) Cost audit has not been conducted as ordered by the Central Government
under Section 233-B of the Companies Act, 1956.
6) The company has not transferred the unclaimed and unpaid dividend of Rs.
55,502, & Rs. 13,140 for the financial years 1995-96, 1998-99 respectively
to Investor Education and Protection Fund as required under sub section (2)
of section 205C of the Companies Act, 1956 being the amounts have remained
unclaimed and unpaid for a period of more than seven years from the date
they became due for payment.
(v) Subject to the foregoing, in our opinion and to the best of our
information and according to the explanations given to us, the said
accounts give the information required by the Companies Act, 1956, in the
manner so required.
a. in the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March 2011; and
b. in the case of the Profit and Loss Account, of the 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.
For N.G. Jain & Co.,
M. No. 100407
Place : Mumbai
Date : 22nd July, 2011.
ANNEXURE referred to in paragraph 1 of our report to the members of Emtex
Industries (India) Limited for the year ended 31st March, 2011
1. The Company is maintaining proper records showing full particulars of
quantitative details and situation of fixed assets. The management at
reasonable intervals has carried out the physical verification of fixed
assets and no material discrepancies were noted on such verification. There
was no substantial disposal of fixed assets during the year.
2. None of the fixed assets have been revalued during the year.
3. The management at reasonable intervals has physically verified the
stocks of finished goods, spare parts and raw materials. The procedures of
physical verification of stocks followed by the management are, in our
opinion, reasonable and adequate in relation to the size of the Company and
the nature of its business. No material discrepancies were noticed on
physical verification of stocks.
4. The company has not given / taken any loans to /from companies, parties
listed in the register maintained under section 301 of the Companies Act,
1956. The parties to whom the loans or advances in the nature of loans have
been given by the Company, where the terms of recovery are stipulated, are
repaying the principal amount and interest . Further the company has given
advances of Rs. 109.99 Lacs to suppliers for the specific orders are
remained outstanding for more than three years.
5. In our opinion, and according to information and explanation given to
us, there are adequate internal control procedures commensurate with the
size of the company and the nature of its business for the purchase of
stores, raw material including components, plant and machinery, equipment
and other assets and for the sale of goods.
6. In our opinion and according to the information and explanations given
to us, there are no parties listed in the register maintained under section
301 of the Companies Act, 1956, and hence no transaction in pursuance of
contracts or arrangements that need to be entered into the register
maintained u/s.301 of the Companies Act, 1956 have taken place in this
7. The Company has not accepted any deposits from the public within the
meaning of Sections 58A and 58AA of the Act and the rules framed there
8. In our opinion the company has adequate internal audit system
commensurate with the size and nature of its business .
9. According to the explanation given to us by the company , the
maintenance of cost records is not applicable as prescribed by the Central
Government under section 209(1) (d) of the companies act 1956, Since the
Company is exclusively engaged in processing of fabrics
10. According to the records of the company, the Company is generally
regular in depositing undisputed statutory dues including Provident Fund,
Employees State Insurance, Sales Tax, Customs Duty, Wealth Tax, Excise
Duty, Cess and other statutory dues as applicable to it with the
appropriate authorities. However, in respect of Income tax and other direct
taxes, following un-disputed demands are dues.
Statute Amount (in lacs) Period to which it relates
Income Tax 3.30 Assessment Year 98-99
Income Tax 204.71 Assessment Year 99-2000
Income Tax 49.97 Block Period
According to the records of the Company there are no dues in respect of
sales tax, custom duty, wealth tax, excise duty and cess as at March, 31,
2011, which have not been deposited with the respective authorities.
However, in respect of income tax, following disputed demands are pending.
Statute Amount Period to which Forum where dispute
(in lacs) it relates is Pending
Income Tax (Penalty) 57.08 A.Y.2000-01 ITAT, Mumbai
Income Tax 208.14 A.Y.2000-01 ITAT, Mumbai
Income Tax 394.75 A.Y.1997-98 ITAT
Income Tax (Penalty) 110.16 A.Y.1997-98 ITAT
11. The Company has accumulated losses amounting to Rs.23,067.09 Lacs
(Previous Year Rs, 22,764.09 lacs) as at March 31, 2011. During the year
and in immediately preceding financial year it has incurred cash loss
amounting to Rs. 224.32 lacs (Previous year cash profit of Rs. 13.68 lacs).
12. On the basis of the records examined by us and the information and
explanation given to us, the company has defaulted in repayment of dues to
the financial institutions, bank and debenture holders. During the year,
the company has not borrowed from financial institutions and bank and by
way of debentures.The Company has not worked out interest on borrowed
amounts and hence not provided to the Profit & Loss Account .
13. In our opinion and according to the information and explanation given
to us, no loans and advances has been granted by the company on the basis
of security by way of pledge of shares, debentures and other securities.
14. In our opinion and according to the information and explanation given
to us, the nature of activities of the company does not attract any special
statute applicable to chit fund/nidhi/mutual benefit fund/societies
accordingly clause 4 (xiii) of the companies (Auditor Report) order, 2003
is not applicable to the company.
15. Based on our Audit procedures and the information and explanation given
by the management, we are of the opinion that the Company is not dealing /
trading in shares, securities, debentures and other investments.
Accordingly, clause 4 (xiv) of the Companies (Auditors Report) order, 2003
is not applicable to the company.
16. In our opinion and according to the information and explanations given
to us, the Company has not given any guarantee for loans taken by others
from Banks or financial institutions during the year.
17. In our opinion and according to the information and explanations given
to us, on an overall examination of balance sheet, we report that term
loans were applied for the purposes for which the loans were obtained.
18. According to the information and explanation 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 by
the company. The company has not raised any funds during the year on long-
19. The Company has not made any preferential allotment of shares during
20. The Company has not issued any debentures during the year.
21. The Company has not raised any money through a public issue during the
22. During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations given
to us, we have neither come across any instance of fraud on or by the
Company, noticed or reported during the year, nor have we been informed of
such case by the Management.
For N.G. Jain & Co.,
M. No. 100407
Place : Mumbai
Date : 22nd July, 2011.