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Kareems Silk International Ltd.

BSE: 503830 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Kareems Silk International Ltd. (KAREEMSSILK) - Auditors Report

Company auditors report

KAREEMS SILK INTERNATIONAL LIMITED ANNUAL REPORT 2007-2008 AUDITORS' REPORT We have audited the attached Balance Sheet of KAREEMS SILK INTERNATIONAL LIMITED as at 31st March, 2008, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We 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 (Auditor's Report) Order, 2003. as amended, 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. Further to our comments in the annexure referred to above we report that : 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 audit: ii) in our opinion, proper books of accounts as required by Law have been kept by the Company so far as appears from our examination of such books: iii) the Balance Sheet, Profit and Loss account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; iv) in our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956: v) on the basis of written representation received from the Directors as on 31st March, 2008 and taken on record by the Beard of Directors, we report that none of the Directors is disqualified as on 31st March, 2008 from being appointed as a Director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956; vi) in our opinion and to the best of our information and according to the explanations given to us, subject to Note No. 9 on networth in Notes on Accounts, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2008: b) in the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date: and c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. for and on behalf of M/s. S. Janardhan & Associates Chartered Accountants BALAKRISHNA. S. BHAT Partner Place: Bangalore Date : 30th July, 2008 ANNEXURE TO THE AUDITORS REPORT (Referred to fan paragraph 1 of our Report of even date) 1. a. The Company has maintained proper records to show full particulars including quantitative details and situation of fixed assets. b) The Management have certified that the assets have been physically verified during the year at reasonable intervals and that no serious discrepancy were noticed on such verification. c) The Company during the year has not disposed off a substantial part of the Fixed Assets. As such the same has not affected status of the Company as a going concern. 2. a) The inventories have been physically verified once during the year by the management. b) On physical status of the inventories, we are unable to comment upon the adequacy of the procedure and reasonableness followed by the management. c) The Company is maintaining proper records of inventories The discrepancies noticed on such verification between the physical stock and the book records were material and the same has been properly dealt with the books of accounts. 3. According to the information and explanations given to us, the Company has neither taken nor granted loans, secured or unsecured to or from Company/Firm or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 and hence the provisions of para (iii) b, c and d of the Order are not applicable. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control. However there are no purchase of inventory, fixed assets and sale of goods. 5. According to the information and explanations given to us, there are no transactions that needed to be entered into a register maintained under Section 301 of the Companies Act, 1956 and hence the provisions of para 5 b are not applicable. 6. The Company has not accepted deposits from the public during the year. 7. In our opinion, the Company has an in-house internal audit system commensurate with the size of the Company and nature of its business. 8. During the year the Company has not maintained any cost records as prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 as the Company is not carrying out any commercial production. 9. The details of undisputed statutory dues not deposited by the Company with appropriate authorities outstanding for a period for more than 6 months from the date they become payable are as under: Name of the Nature of Amount Period Statute dues Rs. ESI Contributions 1121417 Upto 09/2000 Central Central Excise 13461110 11/1990-05/1995 Excise duty However, according to the information and explanations given to us, the Company prefers to file an appeal with the appropriate authority in respect of Central Excise duty. 10. The accumulated losses of the Company as at the end of the year is more than its networth and the Company has incurred cash losses in the current financial year as well as in the financial year immediately preceding the current financial year. 11. The Company has defaulted in repayment of dues to Bank and Financial Institutions. The details of amount of default are as under : Name of the Bank/Financial Amount (Rs.) Institution 1. State Bank of India 43480702.00 2. Industrial Development 1847431.00 Bank of India 3. Karnataka State Financial 1915200.00 Corporation 12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The Company is not a chit fund or a Nidhi/Mutual Benefit Fund/Society. Therefore the provisions of clause (xiii) and (xiv) of para 4 of the order are not applicable. 14. During the current financial year, the Company has not dealt with or traded in shares, securities and debenture. 15. In our opinion, the terms and condition on which the Company has given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company. 16. The Company has not borrowed any term loan during the year and hence the provisions of clause (xvi) of para 4 of the order are not applicable. 17. 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 investments. No long term funds have been used to finance short term assets except permanent working capital. 18. The Company has not made any preferential allotment of shares during the year and hence the provisions of clause (xviii) of para 4 of this order are not applicable. 19. The Company has not issued any debentures during the year and hence the provisions of clause (xix) of para 4 of this order are not-applicable. 20. The Company has not raised any monies by way of public issues during the year and hence the provisions of clause (xx) of para 4 of this order are not applicable. 21. During the course of our examination of the books of accounts carried on 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 has been noticed or reported during the year nor have been informed of such case by the management. for and on behalf of M/s. S. Janardhan & Associates Chartered Accountants BALAKRISHNA. S. BHAT Partner Place: Bangalore Date : 30th July, 2008.