The Members of
M/s.Amarjothi Spinning Mills Limited
Report on the Standalone Financial Statements:-
I have audited the accompanying standalone financial results of Amarjothi SpinningMills Limited which comprise the Balance sheet as at 31st March 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 of thesestandalone 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 133of the Act read with Rule 7 of the Companies (Accounts) Rule 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies making judgements and estimates that are reasonable and prudent anddesign implementation and maintenance of adequate internal financial controls that wereoperating 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.
My responsibility is to express an opinion on these Standalone financial statementsbased on my audit.
I 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.
I conducted my audit in accordance with the Standards on Auditing specified u/s 143(10)of the Act. These standards require that I comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the 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 of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my Audit Opinion on the Standalone financial statements.
In my opinion and to the best of my information and according to the explanations givento me the aforesaid standalone financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its PROFIT/LOSS and its CASH FLOWS for the yearended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:-
As required by the Companies (Auditor's Report) Order 2016 ('the Order)issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Act we give in the ANNEXURE - A a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.
As required by Section 143 (3) of the Act I report that:
A I have sought and obtained all the information and explanations which to the bestof my knowledge and belief were necessary for the purposes of my audit.
B. In my opinion proper books of accounts as required by law have been kept by thecompany so far as it appears from my examination of those books.
C. NOT APPLICABLE.
D. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
E. In my opinion the aforesaid standalone financial statements comply with theAccounting Standards specified u/s 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
F. On the basis of the written representations received from the directors as on 31stMarch 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st march 2016 from being appointed as a director in termsof section 164(2) of the Act.
G With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to myseparate Report in Annexure - B.
H. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in my opinionand to the best of my information and according to the explanations given to me;
1. The Company does not have any pending litigations which would impact its financialposition.
2. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
3. There has been no delay in transferring amounts required to be transferred to theInvestor Education and protection Fund by the Company.
Membership No: 023661.
Place : Coimbatore
Date : 27.05.2016
ANNEXURE - A TO THE AUDITORS' REPORT:-
(Referred to in paragraph (1) under 'Report on other legal and regulatory requirements'of my report of even date)
In terms of the information and explanations sought by me and given by the company andthe books and records examined by me in the normal course of audit and to the best of myknowledge and belief I report the following:-
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the yearwhich in my opinion is reasonable having regard to the size of the company and the natureof its assets. No material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties of the company shown under theFixed Assets schedule are held in the name of the company.
2. The inventories have been physically verified by the management at reasonableintervals during the year. In my opinion the frequency of such verification is reasonableand no material discrepancies were noticed at the time of verification.
3. The Company has not granted loans secured or unsecured to Companies Firms LLPsor other parties covered in the register maintained under section 189 of the Act.
4. In respect of loans investments and guarantees the provisions of Sections 185 and186 of the Act have been complied with.
5. The Company has not accepted any deposits to which the provisions of Sections 73 to76 or any other relevant provisions of the Act and the rules framed there under and theDirections issued by the RBI are applicable. Hence paragraph 3 (5) of CARO is notapplicable to the company.
6. I have broadly reviewed the books of accounts maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records under section148 of the Act and I am of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. I have not however made a detailed examination ofthe cost records with a view to determining whether they are accurate or complete.
7. (a) Undisputed statutory dues including PF or ESI Income Tax sales tax servicetax Excise duty customs duty VAT cess etc have been regularly deposited by the Companywith the appropriate authorities in all cases during the year.
(b) There are no dues of income tax sales tax customs duty excise duty service taxVAT or cess etc which have not been deposited on account of any dispute. A sum ofRs.1579232 has not been paid being Generation tax payable on electricity charges. Thematter is under dispute and pending with the honourable high court of Madras.
8. The Company has not defaulted in repayment of loans taken from FinancialInstitution Banks Government or dues to Debenture holders.
9. The Company has not raised any money by way of Initial Public offer/Further Publicoffer during the year. In my opinion the moneys raised by way of Term Loans during theyear have been applied for the purposes for which those are raised.
10. Based upon the audit procedures I report that no fraud by the company and no fraudon the company by its officers/employees has been noticed or reported during the course ofmy audit.
11. The Managerial Remuneration has been paid / provided in accordance with therequisite approvals mandated by section 197 read with Schedule V of the Act.
12. The Company is not a NIDHI Company and therefore clause 3 (12) of the Order is notapplicable to the Company.
13. In my opinion all the related party transactions entered into by the companyduring the year are in compliance under section188 of the Act and the details there ofhave been disclosed in the financial statement as required by the Accounting Standard andthe Act. The Company has a duly constituted Audit Committee as required under section 177of the Act.
14. The Company has not made any preferential allotment / private placement of sharesduring the year and therefore clause 3 (14) of the Order is not applicable to the companyfor the year under review.
15. The Company has not entered into non cash transactions with directors / personsconnected with him as stipulated under section 192 of the Act. Clause 3 (15) of the Orderis therefore not applicable to the company.
16. In my opinion the company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934.
Membership No: 023661.
Place : Coimbatore
Date : 27.05.2016
ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF AMARJOTHI SPINNING MILLS LIMITED.
Report on the Internal Financial Controls under clause (i) of sub section 3 of Section143 of the Companies Act 2013 ("The Act").
I have audited the internal financial controls over financial reporting of AmarjothiSpinning Mills Limited ("the Company") as of March 31st 2016 inconjunction with my audit of the standalone financial statements of the company for theyear 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 "the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate Internal Financial Controls thatwere operating 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.
My responsibility is to express an opinion on the Company's internal financial controlsover financial reporting based on my audit. I conducted my audit in accordance with theGuidance Note on Internal Financial Controls Over Financial Reporting ("the GuidanceNote") and the Standards on Auditing issued by the ICAI and deemed to be prescribedunder section 143(10) of the Companies' Act 2013 to the extent applicable to an audit ofinternal financial controls both issued by the Institute of Chartered Accountants ofIndia. Those standards and the Guidance Note require that I comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
My audit involves performing procedures to obtain evidence about the adequacy of theinternal financial controls system over financial reporting and their operatingeffectiveness. My audit of internal financial controls over financial reporting includedobtaining an understanding of internal controls over financial reporting assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my audit opinion on the Company's internal financial controls systemover financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING:
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that:-
a) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company.
b) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
c) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In my opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on"the internal control over financial reporting criteria established by the companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".
Membership No: 023661.
Place : Coimbatore
Date : 27.05.2016