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Katare Spinning Mills Ltd.

BSE: 502933 Sector: Industrials
NSE: N.A. ISIN Code: INE498G01015
BSE LIVE 15:40 | 17 Aug 15.00 15.00
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15.00

HIGH

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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 15.00
PREVIOUS CLOSE 0.00
VOLUME 150
52-Week high 31.80
52-Week low 14.70
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 15.00
Sell Qty 1850.00
OPEN 15.00
CLOSE 0.00
VOLUME 150
52-Week high 31.80
52-Week low 14.70
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 15.00
Sell Qty 1850.00

Katare Spinning Mills Ltd. (KATARESPINNING) - Auditors Report

Company auditors report

TO THE MEMBERS OF KATARE SPINNING MILLS LIMITED

Report on the Financial Statements

I have audited the accompanying financial statements of KATARE SPINNING MILLSLIMITED ("the company") which comprise the Balance Sheet as at 31 March2015 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary 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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on myaudit.

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 undersection 143(10) of the Act. Those Standards require that I 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 auditor'sjudgment 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 true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation of the financial statements.

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

Opinion

Attention is drawn to the following:

a. As stated in Note No. 15 to the accounts the company has included in othernon-current assets a sum of Rs. 428.00 lacs as deferred interest expenditure. In the pastthe company had availed a term loan ICICI Bank Ltd (which was under OTS with them) whichwas subsequently assigned by ICICI to Kotak Mahindra Bank Ltd. Consequent upon assignmentThe Kotak Mahindra Bank Ltd had filed suit against the company in DRAT for recovery. Thecompany has settled the said loan with Kotak Mahindra Bank Ltd for an agreed amount of Rs.750 lacs of which Rs. 325 lacs was deposited before DRAT and Rs. 425 lacs is paid on orbefore 31/05/2013 and accordingly no balance is now outstanding.

b. The company had a transferred balance in Capital Reserve of Rs. 150 lacs when theloan was settled with ICICI Bank Ltd. The said balance is now reversed from CapitalReserve and balance Rs. 600 lacs represent the amount of interest from the year 2002 tothe date of settlement. The company has deferred this interest amount of Rs. 600 lacs tobe written off over a period of 7 years and have accordingly charged Rs. 86 lacs each yearin the last two years but has not charged Rs. 86.00 lacs to the statement of profit andloss for the year under audit and balance Rs. 428.00 lacs is carried as deferred revenueexpenditure.

c. Had the items reported in para 4 (b) and (c) above been charged to the statement ofprofit and loss the profit for the year of Rs. 18.53 lacs would have been resulted intoloss of Rs. 502.22 lacs. To that extent it has resulted into overstatement of year end netCurrent Assets and Reserves and Surplus by Rs. 502.22 lacs.

d. No provision is made for payment for gratuity on actuarial basis as on 31st March2015 hence its impact on the net profit could not be ascertained as referred to Note. No.27(b) in the notes on accounts.

In my opinion and to the best of my information and according to the explanations givento me except as reported in para 4(a) to (e) above the financial statements give theinformation required by the Act in the manner so required and except as reported in para4(a) to (e) above give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act I give in the Annexure a statement on the matters Specified in paragraphs 3 and 4of the Order to the extent applicable.

2. 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 best ofmy knowledge and belief were necessary for the purposes of my audit.

b) In my opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books. c) The Balance Sheetthe Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are inagreement with the books of account.

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

e) On the basis of written representations received from the directors as on 31 March2015 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2015 from being appointed as a director in terms of Section 164(2) of theAct.

f) In my opinion and to the best of my information and according to the explanationsgiven to me I report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:

g) In my opinion the company has adequate internal financial control systems in placeand the same are effective and commensurate with the nature of business of the company andthe scale of its operations.

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 our opinionand to the best 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.

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 and Protection Fund by the Company.

G M PAWLE
Place : Solapur Chartered Accountant
Date : 31st August 2015
Membership No. : 032561

Annexure to the Auditors' Report

Referred to in paragraph 1 of our report of even date under the heading "Report onOther Legal and Regulatory Requirements"

(i) In respect of its fixed assets:

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

b) Fixed assets have been physically verified by the management during the year inaccordance with the phased programme of verification adopted by the management which inmy opinion provides for physical verification of all the fixed assets at reasonableintervals. No material discrepancies were noticed on such verification.

(ii) In respect of its inventory:

a) The inventories of finished goods semi-finished goods stores spare parts and rawmaterials were physically verified at regular intervals by the Management.

b) The procedures of physical verification of inventories followed by the Management

c) were reasonable and adequate in relation to the size of the Company and the natureof its business.

d) The Company has maintained proper records of its inventories. According toinformation and explanation given to me the discrepancies noticed on physicalverification of stocks as compared to book records were not material and have beenproperly dealt with in the books of account.

(iii) The Company has not granted any loans to companies firms or other partiescovered in the Register maintained under Section 189 of the Companies Act 2013 andtherefore paragraph 3(iii) of the Order is not applicable.

(iv) In my opinion there are adequate internal control procedures commensurate withthe size of the company and the nature of its business for the purchase of inventoryfixed assets and for the sale of goods and services. During the course of my Audit I havenot observed any continuing failure to correct major weaknesses in internal control.

(v) The company has not accepted any deposits from the public during the year exceptthe unsecured advances received from the directors and their relatives/associates.

(vi) I have broadly reviewed the cost records maintained by the Company pursuant to thethe Rules made by the Central Government under Section 148(1) of the Companies Act 2013and are of the opinion that prima facie the prescribed cost records have been made andmaintained. I have however not made a detailed examination of these records with a viewto determining whether they are accurate or complete.

(vii) In respect of statutory dues:

a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-tax Sales Tax Wealth TaxService Tax Custom Duty Excise Duty Cess and other material statutory dues applicableto it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Income-tax Wealth TaxCustom Duty Excise Duty Sales Tax VAT Cess and other material statutory dues inarrears/were outstanding as at 31 March 2015 for a period of more than six months fromthe date they became payable.

c) There were no amounts which required to be transferred by the Company to theInvestor Education and Protection Fund

(viii) The company does not have the accumulated losses at the end of financial year.The company has not incurred any cash losses during the financial covered by my Audit andthe immediately preceding financial year.

In arriving at the accumulated losses and net worth as above I have considered thequantifications which are quantifiable in the audit reports of the years to which theselosses pertain.

(ix) The Company has not defaulted in the repayment of dues to financial institutionsand banks except the Special Capital Incentive in the form of loan of Rs. 316139 whichremained unpaid as at the date of the Balance Sheet.

(x) The company has not given any guarantee for loans taken by others from banks orfinancial institutions during the year.

(xi) The Term loans taken by the company have been applied for the purpose for whichthey were raised.

(xii) To the best of my knowledge and according to the information and explanationsgiven to me no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.

Place : Solapur G.M.PAWLE
Chartered Accountant
Date : 31st August 2015
Membership No. : 032561