The Members of
KALLAM SPINNING MILLS Limited
REPORT ON THE FINANCIAL STATEMENTS
WWe have audited the accompanying financial statements of KALLAM SPINNING MILLSLimited ('the Company') which comprise the Balance Sheet as at March 312015 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting 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 of thesefinancial statements that give a true and fair view of the financial positionfinancialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including Accounting standards specified under section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the company and for prevention and detection offrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; designimplementation and maintenance of adequate internal financial controls that are operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
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 thereunder. We conducted our audit in accordance withthe 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 of 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 atrue and fair view in order to design audit proceduresthat are appropriate in the circumstances butnot for the purpose of expressing an opinionon whether the company has in place an adequate internal financial controls system overfinancial reporting and the operating effectiveness of such controls. An auditalsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's board ofdirectors aswell as evaluating the overall presentation of 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 financal statements.
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 the Balance Sheet of the state of affairs of the Company as at March312015;
b) in the case of the Statement of Profit and Loss of the profit of the Company forthe year ended on that date; and
c) in the case of the Cash Flow Statement of the cash flows of the Company for theyear ended on that date
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2015 ('the Order1)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 3 and4 of the Order..
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 ourexamination of those books and proper returns adequatefor the purposes of the audit have been received from the branches to the extent notvisited by us;
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 March312015 and taken on record by theBoard of Directors none of the directors isdisqualified as on March 312015 from being appointed as a director in terms ofsub-section(2) of section 164 of the Act;
f. 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.
|For BRAHMAYYA & CO. |
|Chartered Accountants |
|Firm Reg.No-000513S |
|KARUMANCHI RAJAJ |
|Membership No: 202309 |
|Place ||: Guntur |
|Date ||: 30-05-2015 |
ANNEXURE 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 312015.
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.
2. In respect of its Inventories ;
a) According to the information and explanations furnished to us the Company hasphysically verified its inventories during the year. In our opinion the frequency ofverification is reasonable.
b) In our opinion the procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business.
c) According to the information furnished to us the Company is maintaining properrecords of inventory.The discrepancies noticed on verification between the physical stocksand the book records which were not material have been properly dealt with in the booksof account.
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) and(b) of paragraph 3 of the Order are not applicable.
4. In our opinion and according to the information and explanations given to us thereare adequate internal control systems commensurate with the size of the Company and thenature of its business with regard to purchase of inventory fixed assets and for the saleof goods and services. Further during the course of our audit we have not come across anyinstances of major weaknesses in internal control that in our opinion require correction.
5. The Company has borrowed interest free unsecured loans from the directors and theirrelatives in pursuance of the stipulation imposed by Andhra bank at the time of lendingand the amount outstanding as on 31.3.2015 against such loans was Rs.148 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 an amount ofRs.868630/- being demand towards Income-tax for the asst. year 2011-12 which wasappealed before Commissioner of Income-tax (Appeals).
c) According to the information furnished to us the company deposited the amountsrequired to be transferred to investor education and protection fund in accordance withthe provisions of section 125 of the Act.
8. According to the information and explanations furnished to us the Company does nothave accumulated losses at the end of the financial year. The Company has not incurredcash losses during the financial year covered by the audit and in the immediatelypreceding financial year.
9. 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. However the companyhas not borrowed any loans from financial institutions or raised any funds by way of issueof debentures.
10. According to the information and explanations given to us the Company has notgiven any guarantee for loans taken by others from banks or financial institutions. Hencethe requirements of clause (x) of paragraph 3 of the Order are not applicable to theCompany.
11. According to the information and explanations given to us the term loans obtainedby the Company during the year have been applied for the purpose for which they wereobtained.
12. During the course of our examination of the books and records of the Companycarried out in accordance with the Generally Accepted Auditing Practices in India andaccording to the information and explanations given to us we have not come across anyinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such case by the mangement.
|For BRAHMAYYA & CO. |
|Chartered Accountants |
|Firm Reg.No-000513S |
|KARUMANCHI RAJAJ |
|Membership No: 202309 |
|Place ||Guntur |
|Date ||30-05-2015. |