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S P Apparels Ltd.

BSE: 540048 Sector: Industrials
NSE: SPAL ISIN Code: INE212I01016
BSE LIVE 15:40 | 22 Aug 387.15 -10.50
(-2.64%)
OPEN

395.60

HIGH

401.25

LOW

382.45

NSE 15:49 | 22 Aug 383.85 -12.50
(-3.15%)
OPEN

397.95

HIGH

399.95

LOW

380.10

OPEN 395.60
PREVIOUS CLOSE 397.65
VOLUME 1973
52-Week high 482.00
52-Week low 277.00
P/E 18.12
Mkt Cap.(Rs cr) 974
Buy Price 0.00
Buy Qty 0.00
Sell Price 387.15
Sell Qty 30.00
OPEN 395.60
CLOSE 397.65
VOLUME 1973
52-Week high 482.00
52-Week low 277.00
P/E 18.12
Mkt Cap.(Rs cr) 974
Buy Price 0.00
Buy Qty 0.00
Sell Price 387.15
Sell Qty 30.00

S P Apparels Ltd. (SPAL) - Auditors Report

Company auditors report

TO THE MEMBERS OF S.P. APPARELS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of S.P. APPARELSLIMITED (“the Company”) which comprise the Balance Sheet as at March 312016 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under Section 133 of the Act as applicable.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 thereunder and the Order under section 143 (11)of the Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat 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 andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that

give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompany’s Directors as well as evaluating the overall presentation of the financialstatements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act 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 March 31 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. 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 it appears from our examination of those books

c) 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

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under Section 133 of the Act as applicable.

e) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164 (2) 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 A”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

g) 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 has disclosed the impact of pending litigations on its financial positionin its financial statements. - Refer Note 28 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts.

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

2. As required by the Companies (Auditor’s Report) Order 2016 (“theorder”) issued by the Central Government in terms of Section 143(11) of the Act wegive in “Annexure B” a statement on the matters specified in paragraphs 3 and 4of the Order.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm’s Registration No.008072S)

C.R. Rajagopal

Partner

Place: Avinashi

Date: June 06 2016

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements’ of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of S.P.APPARELS LIMITED (“the Company”) as of March 31 2016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 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.

Auditor’s 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 under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively 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 proceduresselected depend on the auditor’s judgement 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 sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over 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 (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm’s Registration No.008072S)

C.R. Rajagopal

Partner

(Membership No. 23418)

Place: Avinashi

Date: June 06 2016

ANNEXURE ‘B’ TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2 under “Report on Other Legal and RegulatoryRequirements”Section of our report of even date)

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

(b) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationand explanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date. In respectof immovable properties of land and buildings that have been taken on lease and disclosedas fixed assets in the financial statements the lease arrangements are in the name of theCompany where the Company is the lessee in the agreement.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies covered in the register maintained undersection 189 of the Companies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company’s interest

(b) The schedule of repayment of principal and payment of interest has not beenstipulated and in the absence of such schedule we are unable to comment on the regularityof the repayments or receipts of principal amounts and interest.

(c) As the terms of repayment of principal have not been specified we are unable tocomment whether there are any overdue for more than 90 days as at balance sheet date andwhether the Management has taken reasonable steps for recovery of the principal amounts.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

According to the information and explanations given to us the Company has not acceptedany deposits falling under the directives of Rerserve Bank of India and the provisions ofSections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the Rulesframed thereunder.

(v) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013 for goods manufactured by the company. We havebroadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Records and Audit) Rules 2014 as amended prescribed by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 and are of the opinionthatprima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vi) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees’ State Insurance Income-tax Sales Tax ServiceTax Customs Duty Excise Duty Value Added Tax Cess and other material statutory duesapplicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident FundEmployees’ State Insurance Income-tax Sales Tax Service Tax Customs Duty ExciseDuty Value Added Tax Cess and other material statutory dues in arrears as at March 312016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax and Service Tax which have not beendeposited as on March 31 2016 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount Involved (Rs. In Mio) Amount Unpaid
Income tax Act 1961 Income tax CIT Appeals (II) AY 2009-10 29.58 22.58
Tamilnadu VAT Act 2006 VAT DC Appeals FY 2006-12 5.02 5.02
Finance Act 1994 Service tax CCE Appeals (I) FY 2008-13 0.54 0.54

(vii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government. The Company has not issued any Debentures.

(viii) In our opinion and according to the information and explanations given to usmoney raised by way of term loans have been applied by the Company during the year for thepurposes for which they were raised. The Company has not raised money by way of initialpublic offer/further public offer (including debt instruments) during the year.

(ix) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(x) In our opinion and according to the information and explanations given to us theCompany has provided managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.

(xi) The Company is not a Nidhi Company and hence reporting under clause

(xii) of the CARO 2016 Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Sections 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial Statements as required by the applicableaccounting standards.

(xiii) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 Order is not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xv) The Company is not required to be registered under section 45-I of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm’s Registration No.008072S)

C.R. Rajagopal

Partner

(Membership No.23418)

Place: Avinashi

Date: June 06 2016