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Gem Spinners India Ltd.

BSE: 521133 Sector: Industrials
NSE: GEMSPIN ISIN Code: INE165F01020
BSE 00:00 | 11 Oct Gem Spinners India Ltd
NSE 05:30 | 01 Jan Gem Spinners India Ltd
OPEN 2.55
PREVIOUS CLOSE 2.55
VOLUME 1300
52-Week high 2.60
52-Week low 2.55
P/E
Mkt Cap.(Rs cr) 16
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.55
CLOSE 2.55
VOLUME 1300
52-Week high 2.60
52-Week low 2.55
P/E
Mkt Cap.(Rs cr) 16
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gem Spinners India Ltd. (GEMSPIN) - Auditors Report

Company auditors report

To the members of M/S.GEM SPINNERS INDIA LIMITED Report on the Financial Statements

We have audited the accompanying standalone Ind AS Financial Statements of GEM SPINNERSINDIA LIMITED("the Company") which comprises the Balance sheet as at 31STMarch 2018 the Statement of Profit and Loss and the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Ind AS 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 the Accounting Standards prescribedunder Section 133 of the Act as applicable. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's 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 and rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules made thereunder. We have conducted our audit of standalone Ind AS financial statements in accordancewith 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 andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor'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's preparation ofthe standalone financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall 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 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 312018 and its LOSS and its Cash flows for the year ended on that date.

Emphasis of Matters:-

Without qualifying our report We draw attention to the following matters in the Notesto the financial statements:

Note No.2 in the financial statement which indicates that the company has accumulatedlosses and its net worth has been fully eroded the company has incurred a cash lossduring the year and the company's current liability exceeded its current assets as at thebalance sheet date. These conditions indicate the existence of a material uncertainty thatmay cast significant doubt about the company's ability to continue as a going concern.However the financial statements of the company have been prepared on a going concernbasis for the reasons stated in the said note.

Report on other Legal Requirement

As required by the Company (Auditor's Report) order 2016 (the order) issued by theCentral Government of India in terms of sub-section (11) of section 143 of the act wegive in the Annexure A a statement on the matters specified in the paragraph 3 and 4 ofthe order.

As required by Section 143(3) of the Companies Act 2013 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 is 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 March31 2018 taken on record by the Board of Directors one director Mr. R. VeeramaniManaging director is disqualified as on March 312018 from being appointed as a directorin terms of Section 164(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 B. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting.

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 explanation 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 under the applicable law or accountingstandard.

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

iv. The reporting on disclosure relating to Specified Bank Notes is not applicable tothe companies for the year ended March 312018

For K. Arun Kumar & Associates
Chartered Accountants
FRN: 016215S
Place: Chennai K. Arun Kumar
Date: 30-May-18 MRN: 237426

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT The annexure referred to IndependentAuditor report to the members of the company on the financial statements for the yearended 31 March 2018 we report that:

1. The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets(Propery Plant and Equipment andintangible assets). These fixed assets have been physically verified by the management atreasonable intervals and as explained to us no material discrepancies were noticed onsuch verification during the year. In our opinion the periodicity of physicalverification is reasonable having regard to the size of the company and nature of itsassets.

2. Physical verification of inventory has been conducted at reasonable intervals by themanagement. The procedures of physical verification of inventory followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business. The Company is maintaining proper records of inventory. Asexplained to us the discrepancies noticed on physical verification were not material andthe same have been properly dealt with in the books of account.

3. According to the Information and Explaination given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under Section 189 of the Companies Act 2013.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the act with respectto Loans and investments made.

5. The Company has not accepted any deposits from the public during the year.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records under section148 of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.

7. According to the information and explanations given to us and based on ourexamination of the records of the company the Company is regular in depositing undisputedstatutory dues including provident fund employees' state insurance income taxsales-tax wealth tax service tax duty of customs duty of excise value added tax cessand other statutory dues with the appropriate authorities . There are no undisputedstatutory dues payable in respect of above which were outstanding as at 31st March 2018for a period of more than six months from the date they became payable.

According to the information and explanation given to us there are no statutory duesoutstanding on account of any dispute except:

Name of the statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
Service tax Service tax 58.60 2004-07 2008-09 2010-11 2011-12 CESTAT
Sales tax Sales tax 22.89 2005-06 to 2009-10 Commercial tax
TNEB TNEB 0.70 2012 to Till date TNEB

8. According to information and explanation given to us the company has not taken anyloan either from financial institution bank Government or not issued any debentures.

9. The company did not raise money by way of initial public offer or further publicoffer.

10. We have neither came across any instances of material fraud by the company or onthe company by its officers or employees during our examination of books and records ofthe company based on generally accepted auditing standards in India nor have beeninformed of such case by the management.

11. According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act.

12. The Company is not a Nidhi company. Accordingly paragraph 3(xii) is notapplicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the company the transactions with the related parties arein compliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by theapplicable accounting 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 duringthe year under review.

15. According to the information and explanations given to us the company has notentered into non- cash transactions with the directors of the company or persons connectedwith him.

16. The company is not required to be registered u/s 45 IA of the Reserve Bank of Indiaact 1934.

For K. Arun Kumar &Associattes
Chartered Accountants
FRN: 016215S
Place: Chennai K. Arun Kumar
Date: 30-May-18 MRN: 237426

Annexure - B to Auditor's Report

Report on Internal Financial Controls Under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GemSpinners Limited. ("the Company") as of March 31 2018 in conjunction with ouraudit 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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 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) 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.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 March 312018 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 K Arun Kumar &Associattes
Chartered Accountants
FRN: 016215S
Place: Chennai K Arun Kumar
Date: 30-May-18 MRN: 237426