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L D Textile Industries Ltd.

BSE: 502954 Sector: Industrials
NSE: LDTEXT ISIN Code: N.A.
BSE 05:30 | 01 Jan L D Textile Industries Ltd
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L D Textile Industries Ltd. (LDTEXT) - Auditors Report

Company auditors report

L.D. TEXTILE INDUSTRIES LIMITED ANNUAL REPORT 1999-2000 AUDITORS' REPORT To The Members L.D.TEXTILE INDUSTRIES LTD. We have audited the attached Balance Sheet of M/s L.D.TEXTILE INDUSTRIES LIMITED as at 31st March, 2000 and also the Profit and Loss Account of the Company for the year ended on that date, annexed thereto and report that : 1. As required by the Manufacturing and Other Companies (Auditors' Report) Order, 1988 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure hereto a Statement on the matters specified in Paragraphs 4 and 5 of the said Order. 2. Further to our comments in the Annexure referred to in paragraph 1 above, we state that : a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) 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 the Books of the Company. c) The Balance Sheet and the Profit and Loss Account referred to in this report are in agreement with the books of account. d) For the reasons mentioned in note No.2 (e) of the Schedule "O" the items of income and expenditure mentioned therein continue to be accounted on cash basis. Subject to the above in our opinion the Balance Sheet and the Profit and Loss Account complies with the mandatory Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956. e) (i) Attention is invited to Note No. 1 of Schedule "O" regarding preparation of accounts on a going concern basis despite the accumulated losses of the Company exceeding its Net worth and despite the Company having become a Sick Industrial Company for reasons mentioned therein. (ii) Attention is invited to Note No. 8 of the Schedule "O" regarding accounting treatment for MODVAT on capital goods which was not in accordance with the guidance note on "Accounting Treatment for MODVAT" issued by The Institute of Chartered Accountants of India as result whereof the Gross block of Fixed assets & Reserve and Surplus are higher by Rs.146,02,589/-. Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the notes thereon give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view: i) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 2000 and, ii) in so far as it relates to the Profit and Loss Account of the `Loss' of the Company for the year ended on that date. For RAJENDRA & CO. Chartered Accountants R.J.Shah Partner Mumbai Dated : 27th November, 2000 ANNEXURE TO THE AUDITORS' REPORT Referred to in paragraph 1 of our report of even date 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The fixed assets have been physically verified by the Management at the end of the year, which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been noticed on such verification as compared with available records. 2. None of the Fixed Assets have been revalued during the year. 3. As explained to us, the stock of stores, spares, raw materials and finished goods have been physically verified by the management at the end of the year except for items lying with the third parties. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and nature of its business. 4. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. 5. As explained to us, there were no material discrepancies noticed on physical verifications of the stocks having regard to the size of the operations of the Company and same have been properly dealt with in the Books of Account. 6. On the basis of our examination of the stock and other records, we are of the opinion that the valuation of stocks is fair and proper, and is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year except that the stock of finished goods lying in the bonded warehouse is valued at including excise duty provision. However, the same has no effect on Loss for the year. 7. The Company has taken loans from Companies and other parties as listed in the register maintained under Section 301 of the Companies Act, 1956. According to the information and explanations given to us and in our opinion, the rate of interest and other terms and conditions of the same are prima-facie not prejudicial to the interest of the Company. The Company has taken interest free loan from a Company under the same management within the meaning of Sub-section (1-B) of Section 370 of the Companies Act, 1956. In our opinion the other terms and conditions of the said loan are not prima-facie prejudicial to the interest of the Company. 8. According to the explanation given to us, the Company has not granted any loans, secured or unsecured, to Companies, firms or other parties as listed in the register maintained under Section 301 and/or to the Companies under same management as defined under Sub-section (1-B) of Section 370 of the Companies Act, 1956. 9. In respect of interest free Loans and Advances given to the employees, same are not being recovered as stipulated. 10. In our opinion and according to the information and explanations given to us, and as per test checks carried out, we are of the opinion that internal control is adequate to commensurate with the size of the Company and the nature of its business with regard to the purchase of Stores, Raw material, Plant and Machinery and other Assets and for the sale of goods. 11. In our opinion and according to the information and explanations given to us, there are no transaction of purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs.50,000/- or more in respect of any party. 12. According to the information and explanations given to us, the Company has not determined item wise unserviceable or damaged stores, raw materials and finished goods at the end of the year. 13. The company has not accepted any deposits from the public, hence the question of compliance with the provision of section 58-A of the Companies Act, 1956, and rules framed thereunder does not arise. 14. According to the information and explanations given to us, the Company has no by-products, and in our opinion reasonable records have been maintained by the Company for the sale and disposal of realisable scrap/wastages, wherever significant. 15. During the year under review, the Company does not have formal internal audit system. 16. The Central Government has prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 in respect of manufacturing activities of the Company. We are informed that such accounts and records have been maintained. We have not however made detailed examination of these records. 17. According to the records of the Company, Employees State Insurance dues and Provident Fund dues have not been regularly deposited with the appropriate authorities; E.S.I.C. and, Provident Fund dues outstanding and due as at 31st March, 2000 amount to Rs. 22,68,462/- and Rs. 91,47,404/- respectively. 18. According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales-tax, customs duty and excise duty were outstanding as at 31st March, 2000 for a period of more than six month from the date they become payable, except Sales Tax of Rs. 61,09,420/-, Wealth Tax Rs. 10,000/-, Income Tax Rs.16,31,755/- and Excise Duty of Rs. 41,49,252/-. 19. According to the information and explanations given to us, no personal expenses of employees or Directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice. 20. The Company has became a Sick Industrial Company within the meaning of Clause (o) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. For RAJENDRA & CO. Chartered Accountants R.J.Shah Partner Mumbai Dated : 27th November, 2000