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Kallam Textiles Ltd.

BSE: 530201 Sector: Industrials
NSE: N.A. ISIN Code: INE629F01025
BSE 13:18 | 22 Oct 21.15 0.35
(1.68%)
OPEN

21.45

HIGH

21.45

LOW

20.50

NSE 05:30 | 01 Jan Kallam Textiles Ltd
OPEN 21.45
PREVIOUS CLOSE 20.80
VOLUME 651
52-Week high 33.25
52-Week low 17.75
P/E 5.76
Mkt Cap.(Rs cr) 91
Buy Price 20.70
Buy Qty 10.00
Sell Price 21.15
Sell Qty 69.00
OPEN 21.45
CLOSE 20.80
VOLUME 651
52-Week high 33.25
52-Week low 17.75
P/E 5.76
Mkt Cap.(Rs cr) 91
Buy Price 20.70
Buy Qty 10.00
Sell Price 21.15
Sell Qty 69.00

Kallam Textiles Ltd. (KALLAMTEXTILES) - Auditors Report

Company auditors report

To the Members of

KALLAM TEXTILES LIMITED

(Formerly known as Kallam Spinning Mills Limited)

Report on the Ind AS financial statements

We have audited the accompanying Ind AS financial statements of KALLAM TEXTILESLIMITED (Formerly known as Kallam Spinning Mills Limited) (the Company') whichcomprise the Balance Sheet as at March 31 2018 the Statement of Profit and Loss(including other comprehensive income) the Statement of changes in Equity and theStatement of Cash Flows for the year then ended and a summary of significant accountingpolicies and other explanatory information.

Management's Responsibility for the 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 andpresentation of these Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder Section 133 of the Act.

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 of frauds and other irregularities; selection and applicationof appropriate accounting policies; making judgements and estimates that are reasonableand prudent; design implementation and maintenance of adequate internal financialcontrols that are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the Ind AS 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 Ind AS financial statements basedon our audit. In conducting our audit we have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and Rules made thereunder.

We conducted our audit of the Ind AS 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 Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit 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 board of directors as well as evaluatingthe overall presentation of the Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe 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 2018 its profit total comprehensive income the changes in equity andits cash flows 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 bythe Central 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 paragraphs 3 and 4 of theOrder.

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;

c) The Balance Sheet Statement of Profit and Loss including other comprehensiveincome the Statement of changes in equity and the Statement of Cash Flow dealt with bythis report are in agreement with the books of account;

d) In our opinion the aforesaid Ind AS financial statements comply with the accountingstandards specified under section 133 of the Act.

e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of subsection (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. 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 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.

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 Chevuturi Associates
Chartered Accountants
Firm Registration No.000632S
(Raghunadha Rao Balineni)
Partner
(Membership No: 028105)
Place:Camp: Guntur
Date : 28.05.2018

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in paragraph 1 under "Report on other legal andregulatory requirements" section of our report to the members of KALLAM TEXTILESLIMITED (Formerly known as Kallam Spinning Mills Limited) for the year ended March 312018.

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 explanations furnished to us the Company hasphysically verified its inventories during the year and no material discrepancies werenoticed on such verification. In our opinion the frequency of verification 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 2018 was Rs.320.55 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 Service tax Customs dutyExcise duty Cess GST and any other statutory dues applicable to it. There were noundisputed statutory dues in arrears as at the date of the Balance Sheet under report fora 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 Customs duty Excise duty GSTand Service tax etc. have been disputed by the Company and hence were not remitted tothe authorities concerned at the date of the Balance Sheet under report.

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 borrowedduring the year from banks the proceeds were applied for the purpose for which the saidloans 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 Chevuturi Associates
Chartered Accountants
Firm Registration No.000632S
(Raghunadha Rao Balineni)
Partner
(Membership No: 028105)
Place: Camp: Guntur
Date : 28.05.2018

Annexure "B" to the Independent Auditors' Report

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 KALLAMTEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited ("theCompany") as of 31st March 2018 in conjunction with our audit of the Ind AS financialstatements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued 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 internal financial controls overfinancial reporting of the company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by ICAI and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat 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 sufficient and 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 process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

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 31 March 2018 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 Chevuturi Associates
Chartered Accountants
Firm Registration No.000632S
(Raghunadha Rao Balineni)
Partner
Place:Camp: Guntur (Membership No: 028105)
Date : 28.05.2018