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Eastern Silk Industries Ltd.

BSE: 590022 Sector: Industrials
NSE: EASTSILK ISIN Code: INE962C01027
BSE LIVE 15:40 | 17 Nov 4.93 -0.06
(-1.20%)
OPEN

4.81

HIGH

5.05

LOW

4.81

NSE 15:31 | 17 Nov 4.90 -0.10
(-2.00%)
OPEN

5.25

HIGH

5.25

LOW

4.75

OPEN 4.81
PREVIOUS CLOSE 4.99
VOLUME 12819
52-Week high 9.19
52-Week low 2.00
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4.81
CLOSE 4.99
VOLUME 12819
52-Week high 9.19
52-Week low 2.00
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Eastern Silk Industries Ltd. (EASTSILK) - Auditors Report

Company auditors report

To

The Members

Eastern Silk Industries Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Eastern Silk IndustriesLimited which comprise the Balance Sheet as at 31 st March 2015 the Statement of Profitand Loss and Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information.

Management's responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by themanagement as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2015 and its loss and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to;

a) Note No. 33 (b) to the financial statements which states that the company has notprovided interest to lenders amounting to Rs. 6557.70 lacs

b) Note No. 35 to the financial statements which states that the company is a BIFRcompany pending registration as per the provisions of the SICA Act 1985.

c) Note No. 36(a) to the financial statements which states that a fresh provision ofRs. 3697.22 Lacs has been made during the year for bad & doubtful debts thusaggregating to Rs. 12665.10 Lacs as at 31 st March 2015 against a total Overdue TradeReceivables of Rs. 29468.25 lacs of which Rs. 16803.15 Lacs is considered good forrecovery by the management. We are unable to express any opinion on correctness and/oradequacy of the provision for bad & doubtful debts.

d) Note No. 37 to the financial statements regarding non recognition of Net DeferredTax Assets (DTA) of Rs. 429.77 lacs in the accounts. We are unable to express any opinionregarding non-recognisation of DTA and about its adjustment against future profits of thecompany.

Report on Other Legal and Regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the act we report that:

a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by thecompany so far as appears from our examination of those books;

c) The Balance sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d) In our opinion the Balance sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of written representation received from the directors as at 31 stMarch 2015 and taken on record by the Board of Directors none of the directors isdisqualified as at 31 st March 2015 from being appointed as a director in terms ofSection 164 (2) of the Act.

f) In our opinion the internal financial controls over financial reporting of theCompany and the operating effectiveness of such controls are adequate.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

• The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note No.27 to the financial statements

• The Company has no long-term contracts including derivative contracts hence noprovision is required under the applicable law or accounting standards

• There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
(L.K.Shroff)
Place : Kolkata PARTNER
Date : The 30 th May 2015 Membership No. : 060742

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS

i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. The management has physically verified certain fixed assets during the year inaccordance with a programme of verification which in our opinion provides for physicalverification of the fixed assets at reasonable intervals having regard to the size of theCompany and nature of its assets. According to the information and explanations given tous no material discrepancies were noticed on such verification.

c. In our opinion and according to explanations given to us Fixed Assets disposed offduring the year were not substantial and as such the disposal has not affected the goingconcern concept of the Company.

ii) a. As explained to us inventories have been physically verified by the managementat regular intervals during the year.

b. In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c. In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification as compared to the book records.

iii) The company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act and as suchclauses (iii) (a) and (b) of the order are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us thereare adequate internal control procedures commensurate with the size of the Company andnature of its business for the purchase of inventory fixed assets and also for the saleof goods and services. During the course of our audit we have not observed any majorweakness in internal controls.

v) The Company has not accepted any deposits from the public and as such clause (v) ofthe Order is not applicable.

vi) We have broadly reviewed the books of account maintained by the company pursuant tothe order made by the Central Government for the maintenance of cost records under section148(1) of the Act and we are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not made a detailed examination ofsuch accounts and records.

vii) According to the information and explanations given to us in respect of thestatutory dues:

a. The Company is generally regular in depositing undisputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State Insurance IncomeTax Wealth Tax Sales Tax Service Tax Customs Duty Excise Duty Cess and otherapplicable statutory dues with the appropriate authorities during the year. According tothe information and explanations given to us no undisputed amounts payable in respect ofthe aforesaid dues were outstanding as at 31 st March 2015 for a period of more than sixmonths from the date they became payable.

b. According to the information and explanations given to us details of dues ofCustoms Duty/ Excise

Duty/Income Tax & Sales Tax Wealth Tax Service Tax and Cess which have not beendeposited on account of any dispute are as follows :

Name of the Statute Name of the Dues Amount (Rs. in lacs) Period to which the amount relates Forum where dispute is pending
Central Excise Act Excise Duty and Penalty 26.72 2002-03 Deputy Commissioner Central Excise
Employees State Insurance Act Employees State Insurance 6.03 1995-96 & 2002-03 Asst. Director ESIC
Custom Duty Act Custom Duty 109.77 2001-02 Hon’ble High Court of Karnataka
Customs Duty Act Custom Duty 148.50 2005-06 Commissioner of Custom (Port) Kolkata
Customs Duty Act Custom Duty 78.92 2003-04 CESTAT Bangalore
Customs Duty Act Custom Duty 28.70 2003-04 Commissioner of Custom
Customs Duty Act Custom Duty 44.07 2002-03 Commissioner of Custom
Customs Duty Act Custom Duty 205.00 2010-11 CESTAT Kolkata
Income Tax Act Income Tax 2.31 2004-05 I.T.A.T (Kolkata)
Income Tax Act Income Tax 71.51 2010-11 I.T.A.T (Kolkata)

c. Required amount was transferred to investor education and protection fund inaccordance with the relevant provisions of the Companies Act 2013 and rules made thereunder.

viii) The Company's accumulated losses at the end of the financial year under Audit haseroded more than 100% of the net worth. The company has incurred Cash Losses during thefinancial year and in the immediately preceding financial year.

ix) In our opinion and according to the information and explanation given to us thecompany has defaulted in repayment of the following amount to Banks & to FinancialInstitutions :

a) Term Loan Rs. 5341.59 Lacs
b) Other Loans Rs. 38472.59 Lacs
c) * Interest Rs. 8951.87 Lacs

* Rs. 2394.17 Lacs provided in Statement of Accounts and Rs. 6557.70 Lacs notprovided in the Statement of Accounts.

x) In our opinion and according to the information and explanation given to us noloans and advances have been granted by the Company on the basis of security by way ofpledge of shares debentures and other securities.

xi) The company has not obtained any fresh term loans during the year under review.Accordingly the provisions of clause (xi) of the Order are not applicable to the company.

xii) According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.

For B. K. SHROFF & CO.
Firm Registration No.: 302166E
Chartered Accountants
(L.K.Shroff)
Place : Kolkata PARTNER
Date : The 30 th May 2015 Membership No. : 060742