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Aditya Mills Ltd.

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Aditya Mills Ltd. (ADITYAMILLS) - Auditors Report

Company auditors report

To the Members of M/SADITYA MILLS LIMITED GIN No. L17111RJ1960PLC001171

Report on the Financial Statements

We have audited the accompanying financial statements of M/s. ADITYA MILLS LIMITED (thecompany) which comprise the Balance Sheet as at 31 March 2017 the Statement of Profitand Loss and Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified unctersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the audjr’s judgment including the assessment ot me risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company’s preparation ofthe financial statements that give true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company’s Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except the effects of Emphasis matters described below the aforesaidfinancial statements read with the significant accounting policies and Note 22 give theinformation required by the Act in the manner so required and give a true and fair view inconformity 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 March312017;

b) In the case of the Statement of Profit and Loss of the loss for the year ended onthat date; and

c) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate. Emphasis Matter

We draw attention to note no. 22.13 (ii) for non redemption of Preference Shares dueon 1T.06.2000 and cumulative dividend ofRs. 45.12 lacs due on 11.06.2000. note 22.14 forNon-provision in account note 22.16 (a) regarding valuation stock of land and note 22.30for non-compliance of terms & conditions of the listing agreements with Regional StockExchange namely Calcutta Stock Exchange Limited. Further as informed by the managementthat since 1994 the company was a Sick Industrial Company under BIFR. Further the BIFRde-registered the company as per order dated 19th February 2015.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the

Central Government in terms of Section 143( 11) of the Act and on the basis of suchcheck of the books and records of the company as we considered appropriate and accordingto the information and explanations given to us we give in the Annexure a statement onthe matters specified in Paragraphs 3 and 4 of the Order. ‘

2. As required by section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withthis report are in agreement with the books of accounts.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133oftheAct read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164(2) of the Act.

0 With respect to adequacy of the Internal Financing Reporting of the company and theoperating effectiveness of such controls refer to our separate report in Annexure‘B’

g) With respect to the other matters included in the Auditors’ Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014in our opinionand to our best of our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigations on the financialposition in its financial statements. Refer note no. 22 to the financial statements.

ii. As per information & explanation given to us the Company did not have any

long term contracts including derivative contracts for which there were any materialforeseeable losses. •

iii. There has been no amount required to be transferred to the Investor Educationand Protection Fund by the Company.

iv. The Company has disclosed in its financial statements as to holding as well asdealing in Specified Bank Notes during the period from 8th November 2016 to 30thDegtember 2016 which are in accordance with the books of accounts maintained by thecompany.

Special B-1 Room No. 111 First Floor For G P KEJRIWAL & CO.
22 Godown Industrial Estate Chartered Acoountants
Jaipur-302006 Firm Reg. NO.001036C
Date: 23rd June 2017 Camp: Mumbai (C P JAIN) Partner
M No.70156

Annexure ‘A’ to the Auditors’ Report

The Annexure referred to in our report to the members of M/s. ADITYA MILLS LIMITED (thecompany) for the year ended on 31st March 2017. We report that:

i. a. The Company is in our opinion maintaining proper records showing fullparticulars

including quantitative details and situation of fixed assets.

b. In accordance with the programme of verifying the fixed assets once in 3 yearsfixed assets have been physically verified by the management at the year end. Thediscrepancies noticed were not material and have been properly dealt with in the books ofthe company. The periodicity of Physical Verification in our opinion is reasonable havingregard to the size of the company and the nature of its business.

c. The title deeds of immovable properties are held in the name of the company.

ii. a) The inventory lying with the company has been physically verified by themanagement

at the year end.

b) In our opinion the procedure of Physical Verification of inventory followed by themanagement are reasonable and adequate in relation to size of company and thenature of its business.

c) In our opinion the Company is maintaining proper records of inventory and accordingto the records of company the discrepancies noticed on physical verification of stock

' as compared to book records which in our opinion were not material in relation tothe Company have been properly dealt within the books of accounts.

iij. The company has not granted loans to companies firms or other parties covered inthe ' register maintained u/s 189 of the Companies Act. Therefore the provisions of clause3(iii) of the Order is not applicable to the Company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and security provided if any.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year and hence thedirectives issued by the Reserve Bank of India and the provisions of Section 73 to 76 orany other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules2015 with regard to the deposits accepted from the public are not applicable.

vi. As per information and explanation given by the management the company is notrequired to maintain cost records under sub section (1) of Section 148 of the CompaniesAct 2013.

vii. a) According to the record of the Company the Company has generally regularlydeposited during the year undisputed statutory dues including Provident fund Investor andeducation fund ESI Income Tax VAT (Sales Tax) Service Tax Custom Duty Excise DutyCess and any other statutory dues with the appropriate authorities. According to theinformation and explanations given to us there are no arrears of such outstanding dueswhich remained outstanding as at 31st March 2017 for a period of more than sixmonths from the date they become payable except Rs. 1326936/- brought forward fromearlier years towards difference in custom duty (as certified by the management).

b) On the basis of our examination of the documents produced to us and according to theinformation and explanations given to us the dues of Income Tax Service Tax Duty ofExcise Cess which have not been deposited on account of dispute and the forum where thedispute is pending are as under: -

Nature of Statute Nature of dues Amount involved Period to which it relates to (Year ended) Forum where dispute is pending
ESI Act ESI Demand 1157948 July 1992 to June 1998 Employee Insurance & Civil Judge Ajmer
ESI Act ESI Demand (Damages) 183148 1985-86 to 1987-88 High Court Rajasthan Jaipur
. ESI Act ESI Demand (Interest diff.) 34674 1985-86 to 1987-88 High Court Rajasthan Jaipur '
Total 1375770

viii. According to the record of the Company and as per the information andexplanations given to us the company has not defaulted in repayment of dues to FinancialInstitutions and Banks except loan amount payable to State Industrial InvestmentCorporation Government of Maharashtra Limited of Rs. 52.28 lacs already overdue in aprevious year.

ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of public offerincluding debt instruments. Accordingly the provisions of clause 3 (ix) of the Order arenot applicable to the Company and hence not commented upon.

x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year. •

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided in accords;with the requisite approvals mandated by the provisions of section 197 read with ScheduleV of the Companies Act.

xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions of cl&u4(xii) of the Order are not applicable to the Company.

xiii. In our opinion all transactions with the related parties are in compliance withsection 177 and 188.of the Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

xvi. In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3(xvi) ofthe Order are not applicable to the Company and hence not commented upon.

Special B-1 Room No. 111 First Floor For G P KEJRIWAL & CO.
22 Godown Industrial Estate Chartered Accountants
Jaipur-302006 Firm Reg. No.001036C
Date: 23rd June 2017 (C P JAIN)
Camp: Mumbai Partner
M No.70156

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of AdityaMills Limited (the Company) as of March 312017 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on Internal Control over Financial Reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India"]. These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed u/s 143(10) of the Companies Act 2013to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if sujh controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor’s judgment including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for audit opinion on the Company’s internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reoortina

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;.

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting-principles and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the company has in all material respect an adequate internalfinancial control system over financial reporting and such internal financial control overfinancial reporting were operating effectively as at 31 st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential component on internal control stated in the guidance note on InternalFinancial Control over financial reporting issued by ICAI.

Special B-1 Room No. 111 First Floor For G P KEJRIWAL & CO.
22 Godown Industrial Estate Chartered Accountants
Jaipur-302006 Firm Reg. NO.001036C
Date: 23rd June 2017 (C P JAIN)
Camp: Mumbai Partner
M No.70156