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Padam Cotton Yarns Ltd.

BSE: 531395 Sector: Industrials
NSE: N.A. ISIN Code: INE448D01017
BSE 00:00 | 19 Oct 6.45 -0.33
(-4.87%)
OPEN

6.45

HIGH

6.45

LOW

6.45

NSE 05:30 | 01 Jan Padam Cotton Yarns Ltd
OPEN 6.45
PREVIOUS CLOSE 6.78
VOLUME 21
52-Week high 11.26
52-Week low 6.45
P/E
Mkt Cap.(Rs cr) 3
Buy Price 8.05
Buy Qty 98.00
Sell Price 6.45
Sell Qty 1.00
OPEN 6.45
CLOSE 6.78
VOLUME 21
52-Week high 11.26
52-Week low 6.45
P/E
Mkt Cap.(Rs cr) 3
Buy Price 8.05
Buy Qty 98.00
Sell Price 6.45
Sell Qty 1.00

Padam Cotton Yarns Ltd. (PADAMCOTTON) - Auditors Report

Company auditors report

To the Members of

Padam Cotton Yarns Limited

Karnal

Report on the Standalone Financial Statements Opinion

We have audited the accompanying Standalone financial statements of Padam CottonYarnsLimited ('the Company') which comprise the Balance Sheet as at March 312019 theStatement of Profit and Loss (including other comprehensive income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and asummary of thesignificant accounting policies and other explanatory information (herein after referrefto as " Standalone financial statements.")

In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid Standalone financial statements give the information requiredby the Companies Act 2013 in the manner so required and given a true and fair view inconformity with the Indian Accounting Standards prescribed) under section 133 of the actread with the Companies (Indian Accounting Standards) Rules 2015 as amended("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the company as at March 31 2019 the profit and total comprehensive income itscash flows and changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirement that are relevant to our audit of the financial statementsunder the provisions of the Companies Act 2013 and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matters

Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere address in the context of our audit of the financial statements as a whole andinforming our opinion thereon and we do not provide a separate opinion on thesematters.We have determined the matters described below to be the Key audit matters to becommunicated in our report.

Key Audit Matter Auditor's Response
Recoverability of Insurance Claim Receivable (Non Current Assests) Principal Audit Procedure
The company has material uncertain legal matter of Insurance Claim under dispute. Refer to note 3.01 to financial statements We have involved our internal experts to review the nature of the amount recoverable the sustainability and the likelihood of recoverability upon final resolution.

Management's Responsibility for the Standalone 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 including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Standalone) prescribed underSection 133 of the Act read with relevant rules issued there under.

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 estimate 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 Standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsiblity for the audit of the standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatements whether due to fraudor errorand to issue an auditor's report that includes our opinion Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also

-Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide ato those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for the one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

-Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

-Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management

-Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosure in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

-Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation

Materiality is the magnitude of misstatement in the standalone financial statementthat individually or in aggregate make it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork in evaluating the results of our work and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We described these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements :

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Governments of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in the paragraph 3 and 4 of theorder to the extent applicable.

2. As required by Section 143(3) of the Act we report to the extent applicable 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 accounts as required and By Low have been kept whichby the Company so far as it appears from our examination of those books.

(c) The balance sheet the statements of profit and loss including other comprehensiveincome the statement of cash flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder.

(e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such Control refer to ourseparate report in "Annexure B"

(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 financialposition in its Standalone financial statements - Refer Note 3.01 to the Standalonefinancial statements.

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.

For Harjinder Singh & Co.
Chartered Accountants
(FRN : 014119N)
Sd/-
(Harjinder Singh)
Place : Karnal (Prop.)
Date : 28.05.2019 M.No. 092290

"Annexure A" to the Independent Auditor' Report

Referred to in paragraph I under the heading ' Report on other Legal & RegulatoryRequirement' of our report of even date to the financial statement of the Company for theyear ended March 312019 we report that.

1) The Company is not having any fixed assets. Accordingly the provisions of clause3(i) (a) to (c) of the order are not applicable to the company and hence not commentedupon.

2) (a) The management has conducted the physical verification of inventory atreasonable intervals

(b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.

3) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the

Act. Accordingly the provisions of clause 3 (iii) (a) to (C) of the Order are notapplicable to the Company and hence not commented upon.

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 Companies Act 2013In respect of loans investments guarantees and security.

5) The Company has not accepted any deposits from the public and hence the directivesissued by the

Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 with regard tothe deposits accepted from the public are not applicable.

6) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.

7) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees state ininsurance Income tax sales tax service tax duty of Customs Duty of Excise Value addedTax Cess and any other statutory dues with the appropriate authorities. According to theinformation and explanation given to us no undisputed amounts payable in respect of theabove were in arrears as at March 312019 for a period of morethan six months from thedate on when they become payable

(b ) Detail of dues of Income Tax Sales ax Wealth Tax Service Tax Custom DutyExcise Duty & Cess which have not been deposited as on March 31st 2019 on account ofdisputes are given below:-

Statute Nature of Dues Forum where dispute is pending Period to which the amount relates Amount Involved
Income Tax Income Tax u/s 154 AY 2018-19 1620.00

8) In our opinion and according to the information and explanations given to ustheCompany has not defaulted in the repayment of dues to banks. The Company has not takenany loan either from financial institutions or from the government and has not issued anydebentures.

9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans during the year.Accordingly the provisions of clause 3 (ix) of the Order are not applicable to the Companyand hence not commented upon.

10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

11) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not paid any managerial remuneration during theyear. Accordingly the provisions of clause 3(xi) of the Order are not applicable to theCompany and hence not commented upon.

12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4(xii) of the Order are not applicable to the Company.

13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotmentor privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) ofthe Order are not applicable to the Company and hence not commented upon.

16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.

For Harjinder Singh & Co.
Chartered Accountants
(FRN : 014119N)
Sd/-
(Harjinder Singh)
Place : Karnal (Prop.)
Date : 28.05.2019 M.No. 092290

Annexure - B to the Independent Auditor' Report of even date on the StandaloneFinancial Statements of Padam Cotton Yarns Limited

Report on the Internal Financial Control under Clause (i) of Sub-Section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PadamCottonYarns Limited ("the Company") as of March 312019 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 maintaininginternalfinancial 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 Control over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company policies the safeguarding of its asset theprevention and detection of frauds and errors th e a ccu racy a n d com p l ete n es s ofth e a cco u n ti n g record s a n d th e ti m e l y 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 Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Control and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control 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 Standalone financial statements whether due to fraud orerror.

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 financial statements for external purpose 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 Standalone financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company. and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the Standalone 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 internal finacialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 312019 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 IternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Harjinder Singh & Co.
Chartered Accountants
(FRN : 014119N)
Sd/-
(Harjinder Singh)
Place : Karnal (Prop.)
Date : 28.05.2019 M.No. 092290

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