SIL BUSINESS ENTERPRISES LIMITED
ANNUAL REPORT 2011-2012
The Members of
SIL BUSINESS ENTERPRISES LTD
We have audited the attached Balance Sheet of SIL BUSINESS ENTERPRISES
LIMITED as at March 31, 2012 and also the Profit and Loss Account of the
Company for the year ended on that date, annexed thereto and the cash flow
statement for the year ended on that date. 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 have conducted our audit in accordance with generally accepted auditing
standards in India. These Standards require that we plan and perform the
audit to obtain reasonable assurance whether the financial statements are
free of material misstatements. 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 statements presentation.
1. As required by the Companies (Auditors' Report) Order, 2003 issued by
the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we annex hereto a statement on the matters specified
in paragraph 4 & 5 of the said order.
2. Subject to our comments in the paragraph (1 and 2) 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;
c) the Balance Sheet, Profit and Loss Account and cash flow statement dealt
with by this report are in agreement with the books of account of the
d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in compliance with the Accounting
Standards referred to in Section 211(3C) of the Companies Act, 1956 except
Accounting Standard - AS - 1 Preparation of the Accounts on going concern
basis in Note No. 3 in part B of the Notes on accounts to the financial
e) in view of default in repayment of fixed deposit to the public by the
company and as per the explanation given to us, all the directors, who were
in the office as on 31st March 2012 are disqualified from being appointed /
reappointed as director in other public company under clause (g) of sub-
section (1) of Section 274 of the Companies Act, 1956.
f) Attention is invited to the following notes forming part of notes to the
i) Note No. 1B (2)
Regarding non-provision for differential liabilities of Rs 64,50,00,000
(approx.) towards Secured Lenders and appropriation of sale proceeds of
Rs.19,00,00,000/- (approx) towards interest and non-provision of income tax
liabilities, amount unascertained.
ii) Note No. 1B (3)
Regarding the preparation of the accounts on going concern basis, even
though the Company is not having any definite source of income due to the
sale of majority of the fixed assets by secured lenders
iii) Note No. IB (4)
Regarding liability of Rs 24,63,00,000/- (approx.) to Global Trust Bank
Limited, which is now merged and known as Oriental Bank of Commerce (OBC)
in respect of unsecured Debentures after adjusting a credit of
Rs.5,65,00,000/- (approx.) towards the amount received by them for which no
details were provided by the Bank to the Company. No effect has been given
in the accounts for the same.
Further no provision has- been made in the accounts for interest thereon
from the date of suit due to the said bank in respect of the aforesaid
Debentures, amount unascertained. We are not expressing our opinion of its
consequential impact on Company's Account, as the matter is subjudice.
iv) Note No. 1B (5) (a)
Regarding non-provision of disputed income tax liability of
Rs.23,43,00,000/-(approx) and interest / Penalty thereon and tax liability
pertaining to sale of fixed assets, for which details are not available .
v) Note No. 1B (5) (b)
Regarding non -provision of disputed sales tax liability of Rs 95, 46,000/-
vi) Note No. 1B (6)
Regarding non-provision and non-ascertainment of interest on Loan from
MPSIDC, ADCB ICD and Overdue Fixed Deposits, and non-provision of
differential amount of claim made by MPSIDC which is Rs 2,16,42,00,000/-
(approx) as against liability provided in books of Rs 28,00,00,000/-
vii) Note No. 1B (7) (a)
Regarding non-payment of overdue fixed deposits and non- compliance of
instructions issued by company law board u/s 58A (9) of the Companies Act,
viii) Note No 1B (7) (b)
Regarding settlement of fixed deposit liability without approval of Company
Law Board and writing back of interest provision and crediting short
payment of fixed deposit to Reserves and Surplus. -
ix) Note No.-9
Regarding non- availability of confirmation from debtors, creditors and
loans & advances and unsecured loans.
x) Note No. 20
Regarding non-appointment of the Managing Director and payment of Director
and Committees fees amounting to Rs 2,60,000/- lacs in addition to
reimbursement of expenses for maintaining non executive chairman office &
We are unable to express our opinion in respect of the impact of our
observations stated in Para (f) above on the profitability for the year and
its assets and consequential impact on the reserves of the Company.
g) Subject to the foregoing, we are unable to express our opinion on the
accounts of the Company as for the year ended 31st March 2012 which gives a
true and fair view in conformity with the accounting principles generally
accepted in India.
i) in the case of Balance Sheet, of the state of affairs of the Company as
at March, 2012 and
ii) in the case of Profit and Loss Account, of the profit of the Company
for the year ended on that date.
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
For BHANGARIA & Co.
ICAI Regn No. 129105W
(CA. Nikunj Govind Bhangaria)
Membership No. : 121369
Dated: August 23, 2012.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS' REPORT TO THE MEMBERS
OF SIL BUSINESS ENTERPRISES LTD ON THE ACCOUNTS FOR THE YEAR ENDED 31ST
ANNEXURE TO THE AUDITORS'REPORT (Referred to in paragraph 1 of our Report
of even date)
(i)(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of the fixed assets.
(b) Most of the fixed Assets have been sold by the secured lenders,
therefore the management, as informed, could not carry out the physical
verification of the fixed assets.
(c) According to the information and explanations given to us, the going
concern status of the Company has severely impacted due to sale of
substantial fixed assets by the secured lenders. Reference is 'invited to
note no.1B (3) annexed to the accounts.
(ii) The Company does not have any inventory during the year. Hence the
procedure of maintenance and verification of the same is not applicable.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured to/from companies/firms or other parties covered in the register
maintained under section 301 of the Companies Act,1956. Accordingly, sub
clause (b), (c) and (d) are not applicable.
(iv) 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 with regard to the sale of goods. During the
course of our audit, we have not observed any continuing failure to correct
major weaknesses in internal controls.
(v) According to the information and explanations given to us, the Company
has not entered into any transactions during the year with parties entered
in the register maintained under Section 301 of the Companies Act, 1956.
(vi) In our opinion according to information and explanation given to us,
the Company has not accepted any Fixed Deposit during the year as covered
by under Section 58A and 58AA of the Companies Act, 1956. However, the
Company has defaulted in payment of matured deposit of Rs 12,70,00,000/-
(approx.) and interest thereon upto date of maturity. Moreover, the Company
has also not provided for interest in respect of such matured Fixed
Deposits from the date of maturity till date in the Accounts.
Some of Fixed Deposit holders had taken legal actions and obtained order
from the Company law board in the matter. However, the Company could not
fully comply with the said order. , Further as informed to us, certain
Fixed Deposit holders had approached the Company expressing their
willingness to accept partial payment as referred in Note 1B(7)(b). As
legally advised to the company, such settlement does not contravene the
provision of section 58A and 58AA of the Companies Act, 1956.
(vii) In our opinion, the Company does not have a formal internal audit
(viii) According to the information and explanation given to us, Central
Government has not prescribed the maintenance of cost records under Section
209(1)(d) of the Companies Act, 1956.
(ix) According to the records of the Company, the Company is generally
regular in depositing undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance, Income
tax, Sales tax, Wealth tax, Custom Duty, Excise Duty, Cess and other
material statutory dues applicable to it with the appropriate authorities.
According to the information and explanations given to us, no undisputed
amount payable in respect of above were in arrears, as at March 31, 2012
for more than six month from the date on which they become payable.
(x) According to information and explanation given to us, there are no dues
of sales tax, income tax, custom tax, wealth tax, excise duty / cess which
have not been deposited on account of any dispute except as stated herein
Name of Statute/ Form where dispute is pending- Amount Of
Nature of Dues Dues
Income Tax Act
Income Tax Tribunal (s) 985,79,000
Bombay High Court 1357,30,000
Sales Tax Act High Court/
Sales Tax Commissioner (Appeals) 95,46,000
(xi) The Company's accumulated Losses at the end of the year are higher
than 50% of its net worth. However, it has not incurred cash losses during
the year as well as in the immediate preceding financial year.
(xii) Based on our audit procedures and on the information and explanations
given by the management, we are of the opinion that the Company has
defaulted in repayment of dues to the financial institutions or banks as
Nature of Dues Year Amount of Default
(As per Company's
Books of Accounts)
Term Loan 2002-2003 Onwards 67,911,250
Working Capital Loan ' ' 343,944,917
Other Unsecured Loan -Do- 519,840,201
Further reference is invited to Note No. 1B (6) (ii) regarding default in
payment of dues and interest and Note No. 4 regarding dispute of repayment
to Global Trust Bank now merged and known as the Oriental Bank of Commerce.
Reference is also invited to Note No. 2 regarding sale of fixed assets by
the financial institutions against their dues.
(xiii) Based on our examination of the records and 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.
(xiv) In our opinion, the Company is not a chit fund or a nidhi/mutuf
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the Company.
(xv) In our opinion, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the provisions
of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company.
(xvi) Based on our examination of the records and the information and
explanations given to us, the Company has not given guarantees for loans
taken by others from banks or financial institutions.
(xvii) The company has not raised any new term loans during the year.
(xviii) The fund raised on short term basis during the year have not been
used on long term investment and vice versa
(xix) The Company has not made any preferential allotment of shares during
(xx) The Company has not issued any debentures during the year and
therefore the question of creating security in respect thereof does not
(xxi) The company has not made any public issue of any securities during
the year and therefore the question of disclosing the end-use of money does
(xxii) Based upon the audit procedure performed and the information and
explanations given to us, no fraud on or by the Company has been noticed or
reported during the year.
For BHANGARIA & Co.
ICAI Regn No. 129105W
(CA. Nikunj Govind Bhangaria)
Membership No. : 121369
Dated: August 23, 2012.