Runeecha Textiles Ltd.
|BSE: 590124||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE373L01010|
|BSE 00:00 | 09 Feb||Runeecha Textiles Ltd|
|NSE 05:30 | 01 Jan||Runeecha Textiles Ltd|
|BSE: 590124||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE373L01010|
|BSE 00:00 | 09 Feb||Runeecha Textiles Ltd|
|NSE 05:30 | 01 Jan||Runeecha Textiles Ltd|
TO THE MEMBERS OF RUNEECHA TEXTILES LIMITED
Report on the Financial Statements
1. We have audited the accompanying financial statements of Runeecha Textiles Limited("the Company") which comprise the Balance Sheet as at 31st March 2016 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information which we havesigned under reference to this report.
Management's responsibility for the Financial Statements
2 The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provision of the Act for safeguarding the assetsof the Company and for preventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3 Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
4 An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments; theauditor considers internal control relevant to the Company's preparation and fairpresentation of the financial statements in order to design the audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and reasonableness of the accounting estimates made by themanagement as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
6 In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: (i) in the case of the Balance Sheet of the stateof affairs of the Company as at 31st March 2016; (ii) in the case of the Statement ofProfit and Loss of the loss of the Company for the year ended on that date; and (iii) inthe case of Cash Flow Statement of the cash flows of the Company for the year ended onthat date.
Emphasis of Matter i) We draw attention to Note 36 to the financial statementswherein in the opinion of the management despite accumulated losses of the Companyhaving exceeded the net worth (excluding revaluation reserves) no operations in last twoyears and defaults in payment of loans and interest thereon the financial statements havebeen prepared on a going concern bas is in view of matters more fully explained in thesaid note. ii) We draw attention to Note no. 39 of the financial statements wherein themanagement has explained reasons for disclosing optionally convertible cumulativepreference shares which were overdue for redemption and have been granted extension aspreference shares under shareholders' funds. iii) We draw attention to Note No. 41 of thefinancial statement the company has received the notice for Bank under section 13(2) and13(4) of the Securitisation and Reconstruction of Financial Assets & Enforcement ofSecurity Interest Act 2002.
Our report is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirement
7. As required by the Companies (Auditor's Report) Order 2016 ('Order') issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act weenclose in the Annexure 'A' a statement on the matters specified in paragraphs 3 and 4 ofthe said Order.
8 As required by Section143 (3) of the Act we report that: a. we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b. in our opinion proper books ofaccounts as required by the law have been kept by the Company so far as appears from ourexamination of those books; c. the Balance Sheet Statement of Profit and Loss and CashFlow Statement dealt with by this report are in agreement with the books of account; d. Inour opinion the aforesaid financial statements dealt with by this report comply with theAccounting Standards referred to in section 133 of the Companies Act 2013; e. on thebasis of written representations received from the directors as on 31st March 2016 andtaken on record by the Board of Directors we report that none of the directors isdisqualified as on 31st March 2016 from being appointed as director in terms of section164(2) of the Companies Act 2013 ; f. With respect to the adequacy of the InternalFinancial Controls over the financial reporting of the Company and operating effectivenessof such controls refer to our separate Report in "Annexure B"; and g. Withrespect to the other matters to be included in the Auditor's Report in accordance withRule11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best ofour information and according to the explanations given to us: i. The Company has nopending litigations as at 31st March 2016 which has impact on its financial position ii.The Company did not have any long term contracts involving losses and had no derivativecontracts outstanding as at 31st March 2016; and iii. There were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
The Annexure "A" referred to in paragraph 7 of our report of even date to themembers of Runeecha Textiles Limited on the financial statements for the year ended 31stMarch 2016.
i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us physical verification of fixed assets has been carried out bythe Company and no material discrepancies were noticed on such verification. In ouropinion the frequency of verification is reasonable having regard to- the size of theCompany and nature of its business.
(c) Title deeds of immovable properties of the company are held in the name of theCompany.
ii) (a) The inventories have been physically verified during the year by the managementat reasonable intervals.
(b) In our opinion no material discrepancies were noticed on physical verification ofstocks.
iii) According to the information and explanations given to us the Company has duringthe year not granted any loans secured or unsecured to companies firm Limitedliability partnerships or other parties covered in the register maintained under section189 of the companies Act 2013. Accordingly paragraph 3(iii) of the Order is notapplicable to the Company
iv) According to the information and explanation given to us the company has noInvestment Loans and guarantees and hence paragraph 3(iv) of the Order is not applicableto the Company.
v) The Company has not accepted any deposits during the year and hence paragraph 3(v)of the Order is not applicable to the Company.
vi) The Central Government has prescribed the maintenance of cost records under SubSection (1) of Section 148 of the Companies Act 2013 for any of the products of theCompany however there was no production of any items during the year.
vii) (a) According to the records examined by us the Company is not regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees state insurance income tax sales tax service tax duty of custom dutyof excise value added tax cess and other statutory dues wherever applicable.
According to the information and explanations given to us no undisputed arrears ofstatutory dues except Income Tax dues of Rs 1732948/- Provident Fund of Rs 200642/-Employee State Insurance of
Rs 146973/- Tax deducted at source of Rs 417689/- and Service Tax of Rs 58295/-were outstanding as on the last date of the financial year for a period of more than sixmonths from the date they became payable.
(b) According to the records of the Company there was no dues in respect of incometax Sales Tax Service Tax duty of customs duty of excise value added tax cess andother statutory duties which have not been deposited on account of disputes.
viii) Based on our audit procedures and according to the information given themanagement the company has defaulted in repayment of its dues of Rs 214541916/- inrespective of loans or borrowings from bank during the year.
ix) In our opinion and according to the information and explanations given to us theCompany has taken term loan & the same were applied for the purposes for which theywere raised and money has not been raised by way of initial public offer or further publicoffer (including debt instrument) during the year.
x) Based upon the audit procedures performed and to the best of our knowledge andaccording to the information and explanations given to us by the management we reportthat no fraud by the Company or any fraud on the company by its officer or employees hasbeen noticed or reported during the course of our audit.
xi) The Company has paid the managerial remuneration along with the requisite approvalmandated by the provisions of Section 197 read with schedule V to the Companies Act 2013.
xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and hence paragraph 3 (xii) of the Order is not applicableto the Company.
xiii) As explained to us and as per the records of the company in our opinion thetransactions with the related parties are in Compliance with Section 177 and Section 188of the Companies Act 2013 and the details have been disclosed in the financial statementsas required by the applicable accounting standard.
xiv) According to the information and explanations given to us and based on ourexamination of the records the company the company has not made any preferentialallotment or private placement of shares or fully or party convertible debenture duringthe year. Hence paragraph 3 (xiv) of the Order is not applicable to the Company.
xv) During the year the Company has not entered into any non-cash transaction withDirector or person connected with him. Hence paragraph 3 (xv) of the Order is notapplicable to the Company.
xvi) The Company is not required to be registered under section 45-1A of the ReserveBank of India Act 1934 and hence paragraph 3 (xvi) of the Order is not applicable to theCompany.
ANNEXURE "B"TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF RUNEECHA TEXTILES LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of RuneechaTextilesLimited ("the Company") as of March 31 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
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 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'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.
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 Controls 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 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 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 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 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 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.
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 31 2016 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India"