You are here » Home » Companies » Company Overview » Kandagiri Spinning Mills Ltd

Kandagiri Spinning Mills Ltd.

BSE: 521242 Sector: Industrials
NSE: KANDAGIRI ISIN Code: INE292D01019
BSE 00:00 | 18 Sep 24.30 0
(0.00%)
OPEN

24.35

HIGH

25.40

LOW

24.30

NSE 05:30 | 01 Jan Kandagiri Spinning Mills Ltd
OPEN 24.35
PREVIOUS CLOSE 24.30
VOLUME 120
52-Week high 44.00
52-Week low 20.25
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 24.35
CLOSE 24.30
VOLUME 120
52-Week high 44.00
52-Week low 20.25
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kandagiri Spinning Mills Ltd. (KANDAGIRI) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR'S REPORT

To the Members of Kandagiri Spinning Mills Limited

Report on the standalone Ind AS Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of KandagiriSpinning Mills Limited ("the Company") which comprise the Balance Sheet asat March 31 2018 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Statement of Standalone Ind AS Financial Statements

2. 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Standalone IndAS)prescribed under 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 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 Standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under.

4. We conducted our audit of the Standalone Ind AS financial statements in accordancewith the 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 Standalone Ind AS financial statements are freefrom material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.

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

Opinion

7. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs(financial position) of the Company as at March 31 2018 its loss (financial performanceincluding other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.

Emphasis of Matter

8. The Company has generated negative operating cash flows and has incurred substantialoperating losses during the current period and earlier. One of the Units of the Companyhas been sold during the year and the sale consideration used to repay loan creditors. Inorder to continue operations for a reasonable period of time the Company is apparentlydependent on infusion of sufficient funds and restructuring of operations. There is thusin our opinion existence of a material risk as to the Company's ability to continue as agoing concern.

However the promoters have undertaken to provide such financial and other support asis required to enable the Company to settle its obligation as and when they fall due andwe have accordingly considered the disclosure made in note 45 by the management adequatein addressing the issue of 'Going Concern'. Our opinion is not modified in respect of thismatters.

Other Matters

9. The comparative financial information of the Company for the year ended March 312017 and the transition opening balance sheet as at April 12016 included in thesestandalone Ind AS financial statements are based on the previously issued financialstatements prepared in accordance with the Companies (Accounting Standards) Rules2006audited by the predecessor auditor whose reports for the year ended March 31 2017 andMarch 312016 dated May 62017 and May 212016 respectively expressed an unmodifiedopinion. The Comparative financial information for the year ended March 31 2017 and theopening Balance Sheet as at April 1 2016 have been adjusted for the differences in theaccounting principles / policies (refer note 31) adopted by the Company on transition tothe Ind AS which have been audited by us.

Report on Other Legal and Regulatory Requirements

10. As required by Section143 (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 including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport is in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2018 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2018 from being appointed as a director in terms of Section164 (2) of the Companies Act 2013.

(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".

(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 has disclosed the impact of pending litigations on financial positionvide note 38.

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.

11. As required by the Companies (Auditor's Report) Order2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For R Sundararajan & Associates
Chartered Accountants
Registration No. 008282S
Salem S. Krishnan - Partner
May 27 2018 Membership No. 26452

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 10(f) under 'Report on Other Legal and RegulatoryRequirements' section 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")

1 . We have audited the internal financial controls over financial reporting ofKandagiri Spinning Mills Limited ("the Company") as of March 31 2018 inconjunction with our audit of the Standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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 byte 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 the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

3. 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 deemed to be prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.

5. 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

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of 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 (i) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and disposition of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (iii) 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

7. 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

8. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2018 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For R Sundararajan & Associates
Chartered Accountants
Registration No. 008282S
Salem S. Krishnan - Partner
May 27 2018 Membership No. 26452

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 11 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date on the Standalone Ind AS financial statements ofKandagiri Spinning Mills Limited ("the Company") for the year ended March 312018).

1 . In respect of its fixed assets:

(a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets

(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies have been noticed on such verification.

(.c.) According to the information and explanations given to us and based on theexamination of registered sale deeds/ transfer deeds/ conveyance deeds provided to us wereport that the title deeds of all the immovable properties are held in the name of theCompany.

2. As explained to us the inventories other than goods in transit have been physicallyverified at the year-end by the management and no material discrepancies were noticed onsuch physical verification.

3. The Company has not granted any loans secured or unsecured to firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013.

4. The Company has not granted any loans secured or unsecured nor made investmentsfurnished guarantees or provided security to any party covered by provisions of sections185 and 186 of the Companies Act 2013.Hence reporting on whether there is a compliancewith the said provisions does not arise.

5. According to information and explanations given to us the Company has not acceptedany deposits from public however in respect of the deposits accepted from shareholdersthe Company has complied with the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013and the Companies (Acceptance of Deposits) Rules 2014.

6. The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended and prescribed by the Central Government under Sub section (1) of Section 148of the Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. However we have not made a detailed examination ofthe cost records with a view to determine whether they are accurate or complete.

7. According to the information and explanations given to us and the books of accountexamined by us in respect of statutory dues:

(a) The company has generally been regular in depositing material amount of undisputedstatutory dues including provident fund employees' state insurance income-tax sales tax/ GST service tax Customs duty Excise duty value added tax cess and any otherstatutory dues as applicable to the appropriate authorities during the year. It has notbeen regular in depositing undisputed statutory dues pertaining to professional tax withthe appropriate authorities. The arrears of such dues outstanding as at the end of thefinancial year for a period of more than six months from the date they became payableaggregated to Rs 8.60 lakhs.

(b) There are no dues of Income tax Service tax Customs Duty Excise duty or Valueadded tax that have not been deposited on account of any dispute. Details of dues of Salestax which have not been deposited as at March 312018 on account of any dispute is asstated below:

(Rs. in Lakhs)

Nature of dues Disputed dues (Net) Period to which the amount relates Forum where the dispute is pending
Sales tax 0.36 2000-01 Sales tax appellant Tribunal

8. The Company has defaulted in repayment of dues to any financial institution or frombanks. The period and amount of default is as follows:

(Rs. in Lakhs)

Principal
Bank Due Amount Due Date Paid Amount Paid on
State Bank of India
Working Capital Term Loan-780 lakhs
Sep - 17 41.90 30-09-2017 31.90 28-08-2017
10.00 30-10-2017
Corporate Loan 1000 lakhs
Aug - 17 15.00 31-08-2017 6.50 11-05-2017
8.50 30-10-2017
Sep - 17 15.00 30-09-2017 15.00 30-10-2017
Oct - 17 15.00 31-10-2017 15.00 13-11-2017
Karnataka Bank
Working Capital Term Loan-780 lakhs
Apr - 17 41.90 18-04-2017 2.89 30-01-2017
39.01 24-04-2017
May - 17 41.90 18-05-2017 14.58 27-06-2017
27.32 10-08-2017
Jun - 17 41.90 18-06-2017 41.90 14-09-2017
Jul - 17 41.90 18-07-2017 41.90 13-10-2017
Aug - 17 41.90 18-08-2017 41.90 31-10-2017
Sep - 17 41.90 18-09-2017 41.90 31-10-2017
DPN Loan 2000 lakhs
Apr - 17 70.00 28-04-2017 56.00 25-04-2017
14.00 07-07-2017
May - 17 100.00 28-05-2017 100.00 24-08-2017

 

(Rs. in Lakhs)
Principal
Bank Due Amount Due Date Paid Amount Paid on
Corporate Loan 500 lakhs
Apr - 17 5.00 20-04-2017 5.00 24-04-2017
May - 17 5.00 20-05-2017 5.00 11-08-2017
Jun - 17 5.00 20-06-2017 5.00 14-09-2017
Jul - 17 15.00 20-07-2017 15.00 13-10-2017
Aug - 17 15.00 20-08-2017 15.00 31-10-2017
Sep - 17 15.00 20-09-2017 15.00 31-10-2017
Oct - 17 15.00 20-10-2017 15.00 31-10-2017
Nov - 17 15.00 20-11-2017 15.00 12-12-2017
Dec - 17 15.00 20-12-2017 11.40 29-01-2017
3.60 01-02-2018
Jan - 18 15.00 20-01-2018 15.00 28-03-2018
Feb - 18 15.00 20-02-2018 15.00 11-04-2018
Mar - 18 15.00 21-03-2018 15.00 23-04-2018

Details of Term Loan interest repayment during the year 2017-18

Interest
Bank Due Amount Due Date Paid Amount Paid on
State Bank of India
Working Capital Term Loan-780 lakhs
Apr - 17 1.48 30-04-2017 1.48 07-07-2017
May - 17 0.58 31-05-2017 0.58 01-08-2017
June - 17 0.57 30-06-2017 0.57 28-08-2017
July - 17 0.58 31-07-2017 0.58 28-08-2017
Aug - 17 0.52 31-08-2017 0.52 30-10-2017
Sep - 17 0.14 30-09-2017 0.14 30-10-2017
Oct - 17 0.13 31-10-2017 0.13 30-10-2017
Corporate Loan 1000 lakhs
Apr - 17 11.23 30-04-2017 11.23 07-07-2017
May - 17 12.05 31-05-2017 12.05 01-08-2017
June - 17 11.79 30-06-2017 11.79 05-10-2017
July - 17 12.22 31-07-2017 12.22 13-11-2017
Aug - 17 12.19 31-08-2017 12.19 13-11-2017
Sep - 17 11.96 30-09-2017 11.96 13-11-2017
Oct - 17 12.51 31-10-2017 12.51 13-11-2017
Nov - 17 10.00 30-11-2017 10.00 11-12-2017
Dec - 17 9.45 31-12-2017 9.45 28-02-2018
Jan - 18 9.51 31-01-2018 9.51 31-03-2018
Feb - 18 8.70 28-02-2018 8.70 31-03-2018
Mar - 18 9.60 31-03-2018 9.60 20-04-2018
Karnataka Bank Ltd.
Working Capital Term Loan-780 lakhs
Apr - 17 2.62 30-04-2017 2.62 14-06-2017
May - 17 2.44 31-05-2017 2.44 27-06-2017
June - 17 2.44 30-06-2017 2.44 14-09-2017
July - 17 2.45 31-07-2017 2.45 26-10-2017
Aug - 17 2.32 31-08-2017 2.32 31-10-2017
Sep - 17 1.94 30-09-2017 1.94 31-10-2017
Oct - 17 1.43 31-10-2017 1.43 31-10-2017

 

(Rs. in Lakhs)
Interest
Bank Due Amount Due Date Paid Amount Paid on
DPN Loan 2000 lakhs
Apr - 17 1.78 30-04-2017 1.78 07-07-2017
May - 17 1.37 31-05-2017 1.37 24-08-2017
June - 17 1.56 30-06-2017 1.56 24-08-2017
Corporate Loan 500 lakhs
Apr - 17 5.43 30-04-2017 5.43 14-07-2017
May - 17 5.60 31-05-2017 5.60 11-08-2017
June - 17 5.52 30-06-2017 0.66 14-09-2017
4.86 26-09-2017
July - 17 5.77 31-07-2017 5.77 25-10-2017
Aug - 17 5.74 31-08-2017 5.74 31-10-2017
Sep - 17 5.56 30-09-2017 5.56 31-10-2017
Oct - 17 5.65 31-10-2017 5.65 31-10-2017
Nov - 17 4.92 30-11-2017 4.92 12-12-2017
Dec - 17 5.04 31-12-2017 5.04 19-02-2018
Jan - 18 5.04 31-01-2018 5.04 28-03-2018
Feb - 18 4.52 28-02-2018 4.52 11-04-2018
Mar - 18 5.04 31-03-2018 5.04 23-04-2018
Axis Bank Ltd.
Corporate Loan - 240 lakhs
Apr - 17 0.12 30-04-2017 0.12 02-05-2017

9. The Company has not raised any money by way of initial public offer or furtherpublic offers (including debt instruments) during the year. Hence reporting on utilizationof such money does not arise.

10. To the best of our knowledge and belief and according to the information andexplanations given to us and considering the size and nature of the Company's operationsno fraud by the Company and no fraud of material significance on the Company by itsofficer's or employee's has been noticed or reported during the year.

11. According to the information and explanations given to us the company haspaid/provided managerial remuneration in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Companies Act 2013.

12. The Company is not a Nidhi Company and accordingly the provisions of Clause (xii)of the Order are not applicable to the Company.

13. In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with sections 177 and 188 of theCompanies Act 2013 where applicable. The details of the transactions during the yearhave been disclosed in the Standalone Ind AS financial statements as required by theapplicable Accounting Standards. (Refer Note 37).

14. 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 the Order is not applicable.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions during the year with directors orpersons connected with them. Hence reporting on whether there is compliance withprovisions of section 192 of the Companies Act 2013 does not arise.

16. The Company is not required to be registered under section 45- IA of the ReserveBank of India Act 1934.

For R Sundararajan & Associates
Chartered Accountants
Registration No. 008282S
Salem S. Krishnan - Partner
May 27 2018 Membership No. 26452