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Stiles India Ltd.

BSE: 531152 Sector: Consumer
NSE: N.A. ISIN Code: N.A.
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Stiles India Ltd. (STILESINDIA) - Auditors Report

Company auditors report

STILES INDIA LIMITED ANNUAL REPORT 2004-2005 AUDITORS' REPORT TO THE MEMBERS OF STILES INDIA LIMITED) 1. We have audited the attached Balance Sheet of Stiles India Limited as at 31st March 2005, and the Profit and Loss Account and the Cash Flow Statement of the Company 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. 2. We have conducted our audit in accordance with the generally accepted Auditing Standards 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's 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. 4. 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 account as required by law have been kept by the Company so far as appears from our examination of those books; (iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; (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 of 3C of Section 211 of the Companies Act, 1956; (v) On the basis of written representations received from the Directors as on 31st March 2005 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2005 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; (vi) We are unable to comment on the value of inventories of Rs.1,36,52,158 as appearing in the books of account as no there was no movement of stocks during the year and the verification of stocks have not been carried out as at the end of the year. (vii) We are unable to comment on the status of compliance with the conditions of the One-Time-Settlement (OTS) accord reached with the financial institutions and banks and the resultant waiver of dues taken credit for in earlier years. (viii) Subject to our comments in the para 4(vi) and 4 (vii) above, in our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with the notes thereon 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 the Balance Sheet, of the state of affairs of the Company as at 31st March 2005; (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 BRAHMAYYA & CO., CHARTERED ACCOUNTANTS Place: Chennai (P.S.KUMAR) Date : 9th Nov., 2005 Partner Membership No. 15590 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE 1. The provisions of Clauses of Paragraph 4 of the Companies (Auditor's Report) Order, 2003 listed below are not applicable to the Company for the year: a) Clause (vi) regarding acceptance of deposits; b) Clause (viii) regarding maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956; c) Clause (xii) regarding loans granted against pledge of shares and securities etc. d) Clause (xiii) regarding special statute applicable to Chit Funds and Nidhis / Mutual Benefit Fund and Societies; e) Clause (xiv) regarding dealing or trading in shares, securities etc.; f) Clause (xv) regarding guarantee for loans taken by others from bank or financials institutions; g) Clause (xvi) regarding funds raised by term loans and their end use; h) Clause (xviii) regarding preferential allotment of shares to specified parties: i) Clause (xix) regarding creation of securities in respect of debentures; and j) Clause (xx) regarding money raised by public issue and its end use. 2. The Company has maintained proper records showing the full particulars including quantitative details and situation of fixed assets which however need to be updated and enlarged in detail. The fixed assets have not been physically vended by the management during the year. During the year, there was no substantial disposal of fixed assets affecting the status of the company as a going concern. 3. Physical verification of inventory has not been conducted by the Management during the current financial year. The company is maintaining proper records of its inventory. 4. (a) In our opinion and according to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. (b) In our opinion and according to the Information and explanations given to us, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. 5. 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 purchases of inventory, fixed assets and sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls. 6. In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 and therefore reporting under clause v(a) and v(b) of Paragraph 4 of the Order does not arise. 7. In our opinion, the Company does not have an internal audit system during the year under review. 8. According to the records of the Company, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, income tax, sales tax etc. According to the information and explanations given to us, there were no amounts due to be transferred to Investor Education and Protection Fund and the company is exempted from provisions of the Employees State Insurance Act, 1948. There are undisputed amounts payable in respect of statutory dues like provident fund contributions of Rs.9,15,107. Sales tax of Rs.8,496. Professional Tax of Rs.87,958 and Tax deducted at source of Rs.17,142, which are outstanding as ar 31 March, 2005 for a period of more than six months from the date they become payable. 9. Based on our audit procedures and on the information and explanations given by the Management, there are no dues outstanding in respect of income tax, service tax excise duty, customs duty, wealth tax and cess on account of any dispute. 10. The accumulated losses of the company at the end of the financial year is more than fifty percent of its networth and the company has incurred cash losses during the current and immediately preceding financial year. 11. Based on our audit procedures and on the information and explanations given by the management, the company has defaulted in repayment of One Time Settlement (OTS) dues to a financial institution and banks. 12. According to the cash flow statement and other records examined by us and the information and explanations given to us on an overall basis, funds raised on short term basis, prima facie, have not been used during the year for long term investment. 13. Based upon the audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For BRAHMAYYA & CO., CHARTERED ACCOUNTANTS Place: Chennai (P.S.KUMAR) Date : 9th Nov. 2005 Partner Membership No: 15590