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Kallam Spinning Mills Ltd.

BSE: 530201 Sector: Industrials
NSE: N.A. ISIN Code: INE629F01025
BSE LIVE 15:40 | 13 Dec 22.65 -0.30
(-1.31%)
OPEN

23.60

HIGH

23.90

LOW

22.55

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 23.60
PREVIOUS CLOSE 22.95
VOLUME 27694
52-Week high 29.80
52-Week low 16.32
P/E 7.60
Mkt Cap.(Rs cr) 97
Buy Price 22.65
Buy Qty 2000.00
Sell Price 0.00
Sell Qty 0.00
OPEN 23.60
CLOSE 22.95
VOLUME 27694
52-Week high 29.80
52-Week low 16.32
P/E 7.60
Mkt Cap.(Rs cr) 97
Buy Price 22.65
Buy Qty 2000.00
Sell Price 0.00
Sell Qty 0.00

Kallam Spinning Mills Ltd. (KALLAMSPINNING) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

To the Members of

KALLAM SPINNING MILLS LIMITED

Report on the financial statements

We have audited the accompanying financial statementsof KALLAM SPINNING MILLSLIMITED (‘the Company') which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant 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 Accounting standards specified undersection 133 of the read with relevant rules issued there under.

This responsibility includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the company and forprevention and detection of frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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 Rules made there under. We conducted our audit in accordancewith the standards on auditing specified under section 143(10) of the Act. Those standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors'judgement including the assessment the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's board of directors as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India : a) In the case of Balance Sheet of the state ofaffairs of the Company as at March 31 2017; b) In the case of Statement of Profit andLoss of the profit of the Company for the year ended on that date; and c) In the case ofCash Flow Statement of the cash flows of the Company for the year ended on that date.

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 of India in terms of sub-section (11) of section 143 of the Act we give inthe Annexure-A a statement on the 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 and proper returns adequate for thepurposes of the audit have been received from the branches to the extent not visited byus;

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account;

d) In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the accounting standards specified under section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of sub-section (2) ofsection 164 of the Act;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure-B and

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the basis of our information and according to the explanations given to us:

i. The company does not have any pending litigations which would impact its financialposition except those which are disclosed in the notes to the financial statements andpara no.7 in Annexure to our Audit report.

ii. The company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation Protection Fund by the company and

iv. The company has provided requisite disclosures in its financial statements as toholdings as well as dealings in specified th November 2016 to 30th December 2016 and theseare in accordance with the books of accounts maintained by the company. Refer note no.32to the financial statements.

For Brahmayya&Co
Chartered Accountants
Firm Registration No. 000513S
Place : GUNTUR
Date :27-05-2017
(Karumanchi Rajaj)
Partner
(Membership No: 202309)

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in our report to the members of KALLAM SPINNING MILLS LIMITED("Company") for the year ended March 31 2017.

We report that:

1. In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) According to the information and explanations furnished to us the Company has notphysically verified its fixed assets during the year. However the Company has adopted aphased programme of verification which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.

2. In respect of its inventories: a) According to the information and explanationsfurnished to us the Company has physically verified its inventories during the year andno discrepancies were noticed on such verification. In our opinion the frequency ofverification is reasonable

3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act.Consequently clauses (iii)(a)(b) and (c) of paragraph 3 of the Order are not applicable.

4. The company has not advanced any loans or made any investments or provided anyguarantees during the year. Hence the reporting requirements in terms of clause (iv) ofparagraph 3 of the Order regarding reporting on compliance with the provisions of section185 and 186 of the Act with respect to the loans investments and guarantees does notarise.

5. The company has borrowed interest free loans from directors and their relatives inpursuance of the stipulation imposed by Andhra Bank at the time of lending and the amountoutstanding against such borrowings on 31st March 2017 was Rs. 203.05 lakhs. Apart fromthe said amounts the company has not accepted any deposits from the public or members.Hence the question of compliance with the directives issued by Reserve Bank of India andthe provisions of sections 73 to 76 or any other relevant provisions of the Act and therules framed there under does not apply. According to the information furnished to us noorder has been passed on the Company by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any Court or any other Tribunal for non-compliancewith the provisions of sections 73 to 76 of the Act.

6. We have broadly reviewed the books of account and records maintained by the Companypursuant to the rules made by the Central Government for the maintenance of cost recordsunder section 148(1) of the Act and we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not carried out adetailed audit of the same.

7. a) According to the information furnished to us the Company is regular indepositing with appropriate authorities the undisputed statutory dues including ProvidentFund Employees' State Insurance Income-tax Value added tax Wealth tax Service taxCustoms duty Excise duty Cess and any other statutory dues applicable to it. There wereno undisputed statutory dues in arrears as at the date of the Balance Sheet under reportfor a period of more than six months from the date they became payable.

b) According to the information furnished to us and records of the company examined byus there were no amounts of Income tax Value added tax wealth tax Customs duty Exciseduty and Service tax have been disputed by the Company and hence were not remitted to theauthorities concerned at the date of the Balance Sheet under report except amounts of Rs.868630/- and Rs. 648750/-. being net demands towards Income-tax (after payments madeunder protest) for the asst. years 2011-12 and 2014-15 respectively which were appealedbefore Commissioner of Income-tax (Appeals).

8. In our opinion and according to the information and explanations furnished to us bythe Company there were no defaults in repayment of dues to banks or government. Howeverthe company has not borrowed any loans from financial institutions or raised any funds byway of issue of debentures.

9. The company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) during the year. In respect of term loans borrowed frombanks the proceeds were applied for the purpose for which the said loans were raised.

10. According to the information and explanations given to us no fraud by the companyor any fraud on the company by its officers or employees has been noticed or reportedduring the year.

11. According to the information and explanation given to us and based on examinationof the records of the company the company has provided remuneration for managerialpersonnel in accordance with the requisite approvals mandated by the provisions of section197 read with schedule V of the Act.

12. The company is not a nidhi company. Accordingly reporting under provisions of para3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and based on examinationof records of the company transactions with the related parties are in compliance withthe provisions of section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures of thecompany.

15. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv) ofthe Order is not applicable.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Brahmayya&Co
Chartered Accountants
Place : GUNTUR Firm Registration No. 000513S
Date : 27-05-2017 (Karumanchi Rajaj)
Partner
(Membership No: 202309)

Annexure – B to Independent Auditors' Report

KALLAM 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")

We have audited the internal financial controls over financial KALLAM SPINNING MILLSLIMITED reporting ("the Company") as of 31st March 2017 in conjunction withour audit of the financial 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 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the

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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the

Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficientand appropriate toprovide a basis for our 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 assuranceregarding the reliability of financial reporting and the preparation of financialstatements for purposes in accordance with generally accepted accounting principles. Acompany's internal financial control over financial reporting includes those policies andprocedures 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 accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and 3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial 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 respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Brahmayya&Co
Chartered Accountants
Place : GUNTUR Firm Registration No. 000513S
Date : 27-05-2017 (Karumanchi Rajaj)
Partner
(Membership No: 202309)