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Garden Silk Mills Ltd.

BSE: 500155 Sector: Industrials
NSE: GARDENSILK ISIN Code: INE526A01016
BSE 00:00 | 26 Apr 34.25 -0.60
(-1.72%)
OPEN

34.80

HIGH

35.00

LOW

34.05

NSE 00:00 | 26 Apr 34.50 -0.25
(-0.72%)
OPEN

35.15

HIGH

35.30

LOW

34.25

OPEN 34.80
PREVIOUS CLOSE 34.85
VOLUME 5789
52-Week high 53.60
52-Week low 27.00
P/E
Mkt Cap.(Rs cr) 144
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 34.80
CLOSE 34.85
VOLUME 5789
52-Week high 53.60
52-Week low 27.00
P/E
Mkt Cap.(Rs cr) 144
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Garden Silk Mills Ltd. (GARDENSILK) - Auditors Report

Company auditors report

To the Members of Garden Silk Mills Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Garden SilkMills Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report.

5. 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 standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thestandalone financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (hereinafterreferred to as the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

10. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B.

(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 knowledge and belief and according to the information andexplanations given to us.

i. the Company has in accordance with the generally accepted accounting principaldisclosed the impact if any of pending litigations as at 31st March 2017 on itsfinancial position in its standalone financial statements -Refer Note 34;

ii. the Company did not have any long-term contracts including derivatives contracts asat 31st March 2017 hence the question of commenting on any material foreseeable lossesthereon does not arise;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2017; and

iv. the Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016. Based on audit procedures and relying onthe management representation we report that the disclosures are in accordance with booksof account maintained by the Company and as produced to us by the Management -Refer Note35.

For NATVARLAL VEPARI & CO.
Chartered Accountants
Firm Registration Number: 123626W
R. N. VEPARI
Partner
Surat 30th May 2017 Membership No.: 6728

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 9 of the Independent Auditors' Report of even date to themembers of Garden Silk Mills Limited on the standalone financial statements as at and forthe year ended 31st March 2017

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management at reasonable intervals.According to the information and explanations given to us no material discrepancies havebeen noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 12 on fixed assets to the financial statements are held in the name ofthe Company.

(ii) As per the information and explanations given to us the inventories have beenphysically verified by the management at reasonable intervals during the year. In ouropinion the frequency of verification is reasonable. The discrepancies noticed onphysical verification of inventory as compared to book records were not material inrelation to the operations of the Company and the same have been appropriately dealt within the books of accounts.

(iii) The company has not granted any loans secured or unsecured to companies / firms/ Limited Liability Partnerships / Other parties covered in the register maintained undersection 189 of the Act. Therefore the provisions of clause 3(iii) (iii)(a) and (iii)(b)of the said Order are not applicable to the Company.

(iv) The Company has neither granted any loans nor provided any guarantees or securityto the party covered under section 185 of the Act nor made any investment covered undersection 186 of the Act.

(v) The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act in respect of its products to which the said rules are madeapplicable and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.

(vii) a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insuranceincome-tax sales tax value added tax customs duty excise duty service tax cess andother material statutory dues as applicable with the appropriate authorities.

b) According to the information and explanations given to us and the records of theCompany examined by us there were no undisputed amounts payable in respect of income taxprovident fund employees' state insurance value added tax cess and other materialstatutory dues in arrears as at 31st March 2017 for a period of more than six monthsfrom the date they became payable. The particulars of dues of sales tax customs duty andExcise Duty / Service Tax as at 31st March 2017 which have not been deposited on accountof disputes are given below:

Name of Statute Nature of dues Amount (Rs in Lacs) Period to which the amount relates Forum where the dispute is pending Amount deposited against the dispute (Rs in Lacs)
Central Excise Act 1944 Excise Duty/ Service Tax 25.00 1994-95 Mumbai High Court 10.00
Central Excise Act 1944 Excise Duty/ Service Tax 114.72 2006-07 to 2008-09 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) -
Central Excise Act 1944 Excise Duty/ Service Tax 2610.00 2008-09 Gujarat High Court (Ahmedabad) 650.00
Central Excise Act 1944 Excise Duty/ Service Tax 523.07 2006-07 to 2010-11 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) 65.00
Central Excise Act1944 Excise Duty/ Service Tax 96.61 2012-13 Central Excise and Service Tax Appellate Tribunal (Ahmedabad)
Central Excise Act 1944 Excise Duty/ Service Tax 77.75 2008-09 to 2012-13 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) 2.92
Central Excise Act 1944 Excise Duty/ Service Tax 37.40 2010-11 to 2013-14 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) 1.40
Central Excise Act 1944 Excise Duty/ Service Tax 4283.11 1994-95 Gujarat High Court (Ahmedabad)
Central Excise Act 1944 Excise Duty/ Service Tax 120.64 1997-98 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) 4.53
Customs Act 1962 Custom Duty 126.93 2013-14 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) 126.93
Customs Act 1962 Custom Duty 36.42 2013-14 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) 2.37
Customs Act 1962 Custom Duty 33.84 2013-14 Central Excise and Service Tax Appellate Tribunal (Ahmedabad) 4.50
Gujarat Sales Tax Act 1969 Gujarat Sales Tax 80.51 2004-05 The Joint Commissioner of Commercial Tax Appeal (2) Baroda 22.33

(viii) According to the records made available to us and the information andexplanations given by the management the Company has defaulted in repayment of thefollowing dues to financial institutions banks Government or debenture holders as at thedate of Balance Sheet:

Particulars

Amount of default (Rs in Lacs)

Period of Default
Principal Interest
Allahabad Bank 615.24 430.25 2016-17
Bank of Baroda 1035.45 1088.19 2016-17
Bank of India 778.10 813.82 2016-17
Corporation Bank 1009.20 1026.22 2016-17
EXIM Bank 427.35 382.30 2016-17
ICICI Bank 135.93 126.85 2016-17
IDBI 767.76 388.87 2016-17
Indian Bank 97.95 83.38 2016-17
Indian Overseas Bank 281.40 275.89 2016-17
LIC of India 174.64 151.15 2016-17
State Bank of India 647.40 610.38 2016-17
State Bank of Patiala 350.84 390.04 2016-17
State Bank of Travankore 231.90 230.72 2016-17
Union Bank of India 1040.93 1018.96 2016-17

(ix) The Company has not raised any monies by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions of clause 3 (ix) of the Order is not applicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

(xi) According to the information and explanations given by the management the Companyhas paid / provided for managerial remuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it the provisions of Clause 3(xii) of the Order are not applicable to theCompany.

(xiii) The Company has entered into transactions with related parties in compliancewith the provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required underAccounting Standard (AS) 18 Related Party Disclosures specified under section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014.

(xiv) The Company has not made any preferential allotment / private placement of sharesduring the previous year under review in compliance with the requirement of Section 42 ofthe Act. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.

(xv) According to the information and explanations given by the management the Companyhas not entered into any noncash transactions with its directors or persons connected withhim. Accordingly the provisions of clause 3(xv) of the Order are not applicable to theCompany.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For NATVARLAL VEPARI & CO.
Chartered Accountants
Firm Registration Number: 123626W
R. N. VEPARI
Partner
Surat 30th May 2017 Membership No.: 6728

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 10(f) of the Independent Auditors' Report of even date to themembers of Garden Silk Mills

Limited on the standalone financial statements for the year ended 31st March 2017

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

1. We have audited the internal financial controls over financial reporting of GardenSilk Mills Limited ("the Company") as of 31st March 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing and deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of standalone financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For NATVARLAL VEPARI & CO.
Chartered Accountants
Firm Registration Number: 123626W
R. N. VEPARI
Partner
Surat 30th May 2017 Membership No.: 6728