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Kareems Spun Silk Ltd.

BSE: 514294 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Kareems Spun Silk Ltd. (KAREEMSSPUN) - Auditors Report

Company auditors report

KAREEMS SPUN SILK LIMITED ANNUAL REPORT 2007-2008 AUDITORS' REPORT TO SHARE HOLDERS We have audited the attached Balance Sheet of Kareems Spun Silk 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 tile 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 SC-) 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 in so far as it appears from our examination of such books; iii) The Balance Sheet, the 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 representations received from the Directors as on 31st March, 2008 and taken on record by the Board 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 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 on 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. BRAT Partner Place: Bangalore Date : 30th July, 2008 ANNEXURE TO THE AUDITORS REPORT (Referred to in 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 discrepancies 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 during the year by the management. In our opinion the frequency of verification is reasonable. b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c) The Company is maintaining proper records of inventories. The discrepancies noticed on such verification between the physical stock and the book records were not material. 3. According to the information and explanations given to us, the Company has neither taken nor granted any 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 nature of its business with regard to the purchase 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 weaknessss in internal control. 5. According to the information and explanations given to us and on examination of the records, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the Register required to be maintained under that section. However there are no transactions during the year. 6. The Company has not accepted deposits from the public during the year. 7. In our opinion, the Company has an Internal audit system commensurate with the size of the Company and nature of its business. 8. The Company has made and maintained cost records as prescribed by the Central Government under Section 209(1) (i) of the Companies Act, 1956. 9. a) Honourable Appellate Authority for Industrial and Financial Reconstruction (AAIFR) vide its Order dated 14-03-2005 has directed the statutory authorities to waive interest and damages in the interest of Company's successful rehabilitation. Hence your management is advised that no provision (Provident Fund (PF)/Employees State Insurance (ESI)) is necessary as the liabilities stands extinguished. b) According to information and explanations given to us, there are no dues in respect of Sales Tax, Income Tax, Wealth Tax, Service Tax, Excise duty and Cess, which have not been paid on account of dispute. 10. The accumulated losses of the Company as at the end of the year is more than its networth. The Company has incurred cash losses in the year under report. 11. The Company has not defaulted in repayment of dues to Bank, Financial Institutions and Debenture holders. 12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of securities 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 debentures. 15. In our opinion, the Company has not given any guarantees for loans taken by others from banks. 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. 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