INTEGRAL KNIT COMPANY LIMITED
ANNUAL REPORT 2007-2008
1. We have audited the attached Balance Sheet of M/s. INTEGRAL KNIT CO.
LIMITED as at 31st March, 2008 the Profit & 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.
2. We conducted our Audit in accordance with the Auditing Standards
generally accepted in India, These 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.
3. As required by the Companies (Auditor's Report) Order 2003, issued by
the Central Government of India in terms of Section 227 (4A) of The
Companies Act, 1956, we enclose in the annexure a statement on the matters
specified in paragraph 4 & 5 of the said order.
4. Further to our comments in the Annexure referred to above, we report
(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
(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 & 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 & Loss Account and Cash Flow
Statement dealt with by this report comply with the Accounting Standards
referred to in Section 211 (3C) of the Companies Act, 1956.
(v) On the basis of written representations received from the Directors, as
on 31st March 2008 and taken on the record by the Board of Directors, we
report that none of the Directors is disqualified as on that date from
being appointed as a Director in terms of Section 274 (1) (g) 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 true and fair view
subject to Notes on Accounts in general and in particular Note
No.3,4,8,10,15, 16 in conformity with the generally accepted accounting
principles in India
(a) In the case of Balance Sheet, of the state of affairs of the Company as
(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 Cash Flow Statement, of the Cash Flow for the year ended
on that date.
ANNEXURE TO AUDITORS' REPORT
(Refered to in Paragraph 1 of our report of even date)
i)(a) Record showing full particulars including quantitative details and
situation of Fixed Assets are incomplete as the Fixed Assets Register is
not maintained. However, such records ate kept on computer, The fixed
assets were physically verified by the Management in phased manner.
(b) All the Assets have not been physically verified by the Management in a
phased manner during the year but there is a Regular Program of
Verification, which, in our opinion, is reasonable having regard to the
size of the Company and the Nature of its Fixed Assets. No Material
Discrepancies were noticed on such verification.
(c) During the year, the Company has not disposed off a major or
substantial part of the Fixed Assets so as to affect the going concern
status of the Company.
ii)(a) The Inventory has been physically verified by the Management during
the year. The frequency of verification is reasonable.
(b) 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 Inventory and there are no
discrepancies noticed on physical verification of stocks having regard to
the size of the Company's operation.
iii)(a) During the year, the Company had not granted any Loans, Secured or
Unsecured to Companies, Firms or Other Parties covered in the Register
maintained under section 301 of the Companies Act, 1956.
(b) Hence the provisions as to whether the rate of interest and other terms
& Conditions of Loans given or taken by the Company, Secured or 'Unsecured
are Prima Facie Prejudicial to the Interest of the Company are not
(c) So also the provisions as to whether the payment of the principal and
interest are also regular are not applicable.
(d) So also the provisions as to the overdue amount is more than
Rs.1,00,000/- are not applicable.
(e) During the year the Company has not taken any Loans, secured or
unsecured from the Companies, firms or other parties covered in the
register maintained under section 301 of the Act.
(f) Hence the provision as to whether the Rate of interest and other Terms
& Conditions of Loans, taken by the Company, Secured or Unsecured are Prima
Facie Prejudical to the Interest of the Company are not applicable.
(g) So also the provisions as to whether the payment of the Principal and
Interest are also regular are not applicable.
iv) The Internal Control Procedures is commensurate with the size of the
Company and the nature of its Business with regard to the Purchases of
Inventory, Fixed Assets and Sale of Fixed Assets and Sale of Goods &
Services. During the course of our audit, we have not observed any
accounting failure to correct major weakness in internal controls.
v)(a) No particulars of contract or arrangements referred to in section 301
of the Act are needed to be entered into the register maintained under the
(b) The provisions whether each of these transactions made in pursuance of
such contracts or arrangements have been made at prices which are
reasonable having regard to prevailing Market Prices at the relevant time
are not applicable to the Company.
vi) As the Company has not accepted any deposit from the Public; the
provision as to whether the Directives issued by Reserve Bank of India and
provision of Section 58A and 58AA or any other relevant provisions of the
Act and Rules framed there under, where applicable,have been complied with
and in case of non-compliance, stating of nature of contraventions and
whether the company has complied with the Company Law Board or National
Tribunal or Reserve Bank of India or any Court or any other Tribunal are
vii) The Company did not have any internal audit system during the year
viii) The Maintenance of Cost Records has not been prescribed by the
Central Government under Section 209 (1) (d) of the Companies Act, 1956.
ix)(a) The Company is regular in depositing with Appropriate Authorities
Undisputed Statutory Dues including Provident Fund, Investor Education &
Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, Cess and other Material
Statutory Dues applicable to it. i (b) No Undisputed Amounts payable in
respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty Excise Duty and
Cess were in arrears, as on 31st March, 2008, for a period of more than E
(six) months from the date they became-payable.
(c) There are no dues of Sales Tax, Income Tax, Wealth Tax, Service Tax,
Excise Duty and Cess, which have not been deposited on account of any
x) The Accumulated Losses of -the Company have exceeded 50% (Fifty Per
Cent) of its Net Worth as at 31.03.08. The Company has incurred Cash Loss
of Rs36,81,919/- in the current financial year and Rs. 27,10,326/- cash
profit in the immediately preceding financial year. In arriving at the
accumulated losses and net worth as above, we have considered the
qualifications which are quantifiable in the audit reports of the year to
which these losses pertain.
xi) The Company has defaulted in repayment of dues to the following
Financial Institution/s and/or Bank/s and/or Debenture holders in respect
of the following amounts and the period mentioned there against:-
Sr. Name of Bank/Financial Principal Interest Period
No. Institutions Amount Amount
1. IARC (BOB) 7,58,52,912 7,89,76,301 Since June 1998
2. SASF (IDBI) 8,37,38,620 12,58,60,853 Since June 1998
3. SCB (ICICI) 1,04,83,032 1,78,86,555 Since June 1998
xii) The Company has not granted any Loans & Advances on the basis of
Security by way of Pledge of Shares, Debentures and other Securities. Hence
the Provisions as , to whether the Adequate Documents and Records are
maintained and to point out the deficiencies, if any in this regard are not
xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit
Fund/Society. Hence, the Provisions of Clause 4 (xiii) of the Companies
(Auditor's Report) Order 2003 are not applicable to the Company.
xiv) The Company is not dealing in or trading in' Shares, Securities,
Debentures and other investments. Hence, the Provisions of Clause 4 (xiv)
of the Companies (Auditor's Report) Order 2003 are not applicable to the
xv) The Company has not given any Guarantee for Loans taken by others from
Banks or Financial Institutions. Accordingly the Provisions as to whether
the terms & Conditions in respect thereof are prejudicial to the interest
of the Company are not applicable to the Company.
xvi) There are no Term Loans obtained and hence whether they .have been
applied for the purpose for which they were obtained/raised is not
xvii) There have been no fund raised during the year and hence the question
as to whether the Fund raised on short term basis has been used for Long
Term Investments does not arise.
xviii) The Company has not made any Preferential Allotment of Shares to
Parties and .Companies covered in the Register maintained under Section 301
of the Companies Act, 1956. Hence the Provisions as to whether the price at
which shares have been issued is prejudicial to the Interest of the Company
are not applicable.
xix) As there are no Debentures, the Provisions relating to securities or
charge been created in respect of debentures issued is not applicable. As
there are no Debentures, the Provisions relating to securities or charge
been created in respect of debentures issued is not applicable.
xx) The Company has not raised any money by Public Issues. Hence the
Provisions as to whether the Management has disclosed on the end use of
money raised by Public Issues and whether the same has been verified are
xxi) No Fraud on or by the Company has been Noticed or Reported during the
course of our Audit.
For P.M. TURAKHIA & COMPANY
Dated: 27th June, 2008. M.D. TURAKHIA