Auditor Report of Pranavaditya Spinning Mills Ltd.
Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of Pranavaditya Spinning Mills Limited (âthe Companyâ) which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including other comprehensive income), Cash Flow Statement and the statement of changes in equity for the year then ended and a summary of significant accounting policies and other explanatory information.
Managementâs responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance and cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under sec 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs responsibility
Our responsibility is to express an opinion on these standalone Ind AS Financial Statements based on our audit.
We have taken into account the provisions of the Act and the rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS Financial Statements in accordance 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 the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS Financial Statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its Loss (including other comprehensive income), its cash flows and the changes in equity for the period ended on that date.
Report on Other Legal and Regulatory requirements
As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the Annexure ''A'' a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 best of 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 the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and statement of changes in equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone Ind AS Financial Statements- Refer Note Nos. 22 and 31.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, in respect of long-term contracts including derivative contracts.
iii. There were no amounts required to be transferred to the Investor Education and Protection Fund by the Company during the year.
Annexure A referred to in Paragraph (I) under the heading of âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of Pranavaditya Spinning Mills Limited on the standalone Ind AS Financial Statements for the year ended 31st March, 2018.
(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the year as per the phased program designed to cover all the fixed assets over a period, which in our opinion is reasonable having regard to the size of the company and nature of its assets. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of accounts.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) As explained to us, the inventories have been physically verified by the management during the year except stocks lying with third parties in respect of whom confirmations have been obtained and the discrepancies noticed on physical verification as compared to book record, which are not material, have been properly dealt with in the books of account. In our opinion, the frequency of such verification is reasonable.
(iii) As explained to us, the company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and as such clauses (iii) (a), (b) and (c) of the order are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to us no loans, investments, guarantees and security covered under section 185 and 186 of the Companies Act, 2013 has been given by the company. Therefore, the provisions of clause (iv) of the order are not applicable to the company.
(v) According to the information and explanation given to us, the company has not accepted any deposit from the public. Therefore, the provisions of clause (v) of the order are not applicable to the company.
(vi) We have broadly reviewed the books of account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 148(1) of the Act, and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we are neither required to carry out nor have carried out detailed examination of such cost accounting records with a view to determine whether they are accurate or complete.
(vii) According to the records of the company, examined by us and information and explanations given to us:
(a) The company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and others as applicable. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at 31st March, 2018 for a period of more than six months from the date they became payable.
(b) There are no disputed dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax outstanding as at 31st March, 2018.
(viii) In our opinion and according to the information and explanations given to us, the company has no outstanding loans or borrowings from financial institutional, bank or government hence provisions of clause (viii) of the order are not applicable to the company.
(ix) In our opinion, during the year no money has been raised by way of initial public offer or further public offer (including debt instruments) or term loans hence provisions of clause (ix) of the order are not applicable to the company.
(x) According to the information and explanations given to us, no fraud by the company or on the company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion, and according to the information and explanation given to us, during the year the company has not paid/ provided any managerial remuneration and hence provisions of clause (xi) of the order are not applicable to the company.
(xii) The company is not a nidhi company and hence provisions of clause (xii) of the order are not applicable to the company.
(xiii) According to the records examined by us, and information and explanations given to us, all transactions with the related parties are in compliance with Sections 188 and 177 of the Act and necessary details as required by the accounting standards have been disclosed in Note No. 32 of the standalone Ind AS Financial Statements.
(xiv) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year ended 31st March, 2018.
(xv) The company has not entered into any non cash transactions with directors or persons connected with him.
(xvi) The Company is not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934
Annexure B referred to in Paragraph (II)(f) under the heading of âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of Pranavaditya Spinning Mills Limited on the standalone Ind AS Financial Statements for the year ended 31st March, 2018.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Pranavaditya Spinning Mills Limited (âthe Companyâ) as of 31st March, 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (ICAI)â. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that:
a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAIâ.
For Suresh Kumar Mittal &
Co. Chartered Accountants
Firm Reg. No.: 500063N
Ankur Bagla
Partner
Membership Number: 521915
Mumbai, April 30, 2018
Mar 31, 2016
To
The Members of
Pranavaditya Spinning Mills Limited
1. Report on the Standalone Financial Statements
We have audited the accompanying Statement of Standalone Financial Statements of Pranavaditya Spinning Mills Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.
2. Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance 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 the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
4. Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 and its loss and its cash flows for the year ended on that date.
5. Report on Other Legal and Regulatory Requirements
I. As required by the Companies (Auditorâs Report) Order, 2016 issued by the Central Government of India in terms of Section 143(11) of the Act (hereinafter referred to as the âOrderâ) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the âAnnexure Aâ a Statement on the matters specified in paragraphs 3 and 4 of the Order.
II. 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 best of 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 the Company 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 Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on 31st March,
2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its financial statements - Refer Note 18 to the financial statements;
ii. The Company has no long-term contracts including derivative contracts. Hence, no provision is required under the applicable law or accounting standards;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure A referred to in Paragraph 5(I) under the heading of âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of Pranavaditya Spinning Mills Limited on the standalone financial statements for the year ended 31st March, 2016
i. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the year as per the phased program designed to cover all the fixed assets over a period, which in our opinion is reasonable having regard to the size of the company and nature of its assets. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of accounts.
(c) The title deeds of all immovable properties are in the name of the company.
ii. As explained to us, the inventories have been physically verified by the management during the year except stocks lying with third parties in respect of whom confirmations have been obtained and the discrepancies noticed on physical verification as compared to book record, which are not material, have been properly dealt with in the books of account. In our opinion, the frequency of such verification is reasonable.
iii. According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the Register maintained under Section 189 of the Act.
iv. According to the records of the company, examined by us and information and explanations given to us, the company has complied with the provisions of Sections 185 and 186 of the Act with respect to guarantees given. No guarantee was outstanding at the year end. No loan has been given, investments made and securities provided.
v. The company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the rules framed there under to the extent notified.
vi. We have broadly reviewed the cost accounting records maintained by the company prescribed by the Central Government under Section 148(1) of the Act and are of the opinion that prima facie the prescribed records have been maintained. However, we are neither required to carry out nor have carried out detailed examination of such cost accounting records with a view to determine whether they are accurate or complete.
vii. According to the records of the company, examined by us and information and explanations given to us:
a) Undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and others as applicable have generally been regularly deposited with the appropriate authorities except delay in few cases. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at 31st March, 2016 for a period of more than six months from the date they became payable.
b) There are no disputed dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax outstanding as at 31st March, 2016 except dues on account of penalty levied by excise authorities amounting to Rs 1.00 lac for the year have not been deposited and appeal for the same is pending before CESTAT.
viii. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institution, bank or government. The Company has not issued any debentures.
ix. According to the information and explanations given to us, no money has been raised by way public issue (including debt instruments) and no term loan has been raised during the year.
x. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company by its officers/employees has been noticed or reported during the year.
xi. According to the information and explanations given to us, no managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
xii. The Company is not a nidhi company.
xiii. According to the records examined by us, and information and explanations given to us, all transactions with the related parties are in compliance with Sections 188 and 177 of the Act and necessary details as required by the accounting standards have been disclosed in note 27 of the Financial Statements.
xiv. The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year ended 31st March, 2016.
xv. According to the records of the Company examined by us and the information and explanation given to us, the company has not entered into any non-cash transactions with directors or persons connected with him.
xvi. According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure - B referred to in paragraph 5(II)(f) to the Independent Auditorâs Report of even date on the Standalone Financial Statements of Pranavaditya Spinning Mills Limited.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Pranavaditya Spinning Mills Limited (âthe Companyâ) as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (ICAI)â. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for my /our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that:
a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAIâ.
For B.K Shroff & Co.
Chartered Accountants
Firm Registration Number : 302166E
Partner
Membership Number: 6329
Mumbai , May 2, 2016
Mar 31, 2015
We have audited the accompanying financial statements of Pranavaditya
Spinning Mills Limited ("the Company") which comprise the Balance Sheet
as at 31 March 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management's responsibility for the Financial Statements
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 of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and 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 our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance 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 the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide 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
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Companies Act, 2013, we give in
the Annexure, a statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.
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 best of 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 the Company 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 Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2)oftheAct.
f) In our opinion, the internal financial controls over financial
reporting of the Company and the operating effectiveness of such
controls are adequate.
g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position in its financial statements - Refer Note 20 to the
financial statements;
ii. The Company has no long-term contracts including derivative
contracts hence no provision is required under the applicable law or
accounting standards;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
Annexure referred to in paragraph (1) under the heading of "Report on
Other Legal and Regulatory requirements" of our report of even date
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management according to a regular program, which, in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies with respect to book records
were noticed on such verification.
(c) During the year, the company has not disposed off any substantial
part of its fixed assets. Therefore, it has not affected the going
concern concept of the company.
(ii) (a) Physical verification of inventory (except material in
transit) has been conducted by the management at reasonable intervals.
In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and nature of its business.
(c) The company is maintaining proper records of inventory.
Discrepancies noticed on verification of inventory as compared to book
records were not material.
(iii) The company has not granted any loans, secured or unsecured to
companies firms or other parties covered in the register maintained
under section 189 of the Act and as such clauses (iii) (a) and (b) of
the order are not applicable to the company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory and fixed assets and for sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal control system.
(v) According to the information and explanation given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of clause (v) of the Order are not applicable to the
Company.
(vi) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 148 (1) of the Act, and we are
of the opinion that prima facie the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of such accounts and records.
(vii) (a) The company is generally regular in depositing with
the appropriate authorities undisputed statutory dues including
provident fund, investor education and protection fund, employees state
insurance, income tax, wealth tax, sales tax, service tax, custom duty,
excise duty, cess and other statutory dues applicable to it.
(b) Dues on account of penalty levied by excise authorities amounting
to Rs.1.00 lac for the earlier year have not been deposited and appeal
for the same is pending before CESTAT. There are no dues in the nature
of sales tax, income tax, custom tax, wealth tax, excise duty and cess
which are disputed and outstanding.
(c) No amount was required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act,2013 and rules made there under.
(viii) The Company has no accumulated losses as at 31st March, 2015.
The company has not incurred any cash loss during the financial year.
(ix) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders.
(x) In our opinion, the company has not given guarantee for loans taken
by others from banks or financial institutions.
(xi) The company has not obtained any fresh term loans during the year
under review. Accordingly, the provisions of clause (xi) of the Order
are not applicable to the company.
(xii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
ForB.K.Shroff&Co.
Chartered Accountants
Firm Reg. No. : 302166E
Partner
Mumbai, 9th May, 2015 Membership Number: 6329
Mar 31, 2014
To
The Members
Pranavaditya Spinning Mills Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Pranavaditya Spinning Mills Limited (âthe Companyâ) which comprise the Balance Sheet as at 31 March 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and 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 our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Companyâs internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2014;
b) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and
c) In the case of the Cash Flow Statement, of the 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, 2003 (âthe Order"), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(ii) In our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books;
(iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13 September,2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013; and
(v) On the basis of written representation received from the directors as at 31 March 2014 and taken on record by the Board of Directors, none of the directors is disqualified as at 31 March 2014, from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Act.
(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) All the fixed assets have been physically verified by the management according to a regular program, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies with respect to book records were noticed on such verification.
(c) During the year, the company has not disposed off any substantial part of its fixed assets. Therefore, it has not affected the going concern concept of the company.
(ii) (a) Physical verification of inventory (except material in transit) has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.
(c) The company is maintaining proper records of inventory. Discrepancies noticed on verification of inventory as compared to book records were not material
(iii) (a) According to the information and explanations given to us, the company has not granted any loans during the year to the parties covered in the register maintained under section 301 of the Companies Act, 1956.
(b) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act.
(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.
(v) Transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956.
a. Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under the section.
b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of '' 5,00,000/- in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.
(vi) According to the information and explanation given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of clause (vi) of the Order are not applicable to the Company.
(vii) In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of such accounts and records.
(ix) (a) The company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, sales tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it.
(b) Dues on account of penalty levied by excise authorities amounting to Rs, 1 lac for the earlier year have not been deposited and appeal for the same is pending before CESTAT. There are no dues in the nature of sales tax, income tax, custom tax, wealth tax, excise duty and cess which are disputed and outstanding.
(x) The Company has no accumulated losses as at 31st March, 2014. The company has not incurred any cash loss during the financial year.
(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.
(xii) According to the information and explanations given to us, the company has not granted any loan and advance on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the company is neither a chit fund nor nidhi / mutual benefit fund / society and hence clause (xiii) of the Order is not applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause (xiv) of the Order is not applicable to the company.
(xv) In our opinion, the company has not given guarantee for loans taken by others from banks or financial institutions.
(xvi) The company has not obtained any fresh term loans during the year under review. Accordingly, the provisions of clause (xvi) of the Order are not applicable to the company.
(xvii) As per the information and explanations given to us and on an overall examination of the Balance Sheet of company, we are of the opinion that the company has not utilized short-term funds for long term purposes.
(xviii) During the year the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.
(xix) According to the information and explanations given to us, the company has not issued debentures during the year.
(xx) According to the information and explanations given to us, during the year the company has not raised any money by public issue.
(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.
For B.K.Shroff & Co.
Chartered Accountants
Reg. No. : 302166E
O. P. Shroff
Partner
Membership Number 6329
Mumbai, 14th May 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying fnancial statements of Pranavaditya
Spinning Mills Limited ("the Company") which comprise the Balance Sheet
as at 31 March 2013, the Statement of Proft and Loss and Cash Flow
Statement for the year then ended and a summary of signifcant
accounting policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and cash fows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the fnancial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these fnancial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the fnancial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the fnancial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the fnancial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2013;
b) In the case of the Statement of Proft and Loss, of the Proft for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash fows for the
year ended on that date.
Report on Other Legal and Regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specifed in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Statement of Proft and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Statement of Proft and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Act; and
(v) On the basis of written representation received from the directors
as at 31 March 2013 and taken on record by the Board of Directors, none
of the directors is disqualifed as at 31 March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Annexure referred to in paragraph (1) under the heading of "Report on
Other Legal and Regulatory requirements" of our report of even date
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fxed
assets.
(b) All the fxed assets have been physically verifed by the management
according to a regular program, which, in our opinion, is reasonable
having regard to the size of the company and the nature of its assets.
No material discrepancies with respect to book records were noticed on
such verifcation.
(c) During the year, the company has not disposed off any substantial
part of its fxed assets. Therefore, it has not affected the going
concern concept of the company
(ii) (a) Physical verifcation of inventory (except material in transit)
has been conducted by the management at reasonable intervals. In our
opinion, the frequency of verifcation is reasonable.
(b) The procedures of physical verifcation of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and nature of its business.
(c) The company is maintaining proper records of inventory.
Discrepancies noticed on verifcation of inventory as compared to book
records were not material
(iii) (a) According to the information and explanations given to us,
the company has not granted any loans during the year to the parties
covered in the register maintained under section 301 of the Companies
Act, 1956.
(b) The Company has not taken any loan, secured or unsecured from
companies, frms or other parties covered in the register maintained
under Section 301 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory and fxed assets and for sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal control system.
(v) Transactions that need to be entered in the register maintained
under section 301 of the Companies Act, 1956.
a. Based upon the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in section 301
of the Companies Act, 1956, have been entered in the register required
to be maintained under the section.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained section 301 of the
Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect
of any party during the year, have been made at prices which are
reasonable, having regard to prevailing market prices at the relevant
time.
(vi) According to the information and explanation given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of clause (vi) of the Order are not applicable to the
Company.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) The company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees state
insurance, income tax, wealth tax, sales tax, service tax, custom duty,
excise duty, cess and other statutory dues applicable to it.
(b) Dues on account of penalty levied by excise authorities amounting
to Rs. 1 lac for the earlier year have not been deposited and appeal for
the same is pending before CESTAT. There are no dues in the nature of
sales tax, income tax, custom tax, wealth tax, excise duty and cess
which are disputed and outstanding. (x) The Company has no accumulated
losses as at 31st March, 2013. The company has not incurred any cash
loss during the fnancial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
fnancial institution or bank or debenture holders.
(xii) According to the information and explanations given to us, the
company has not granted any loan and advance on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the company is neither a chit fund nor nidhi /
mutual beneft fund / society and hence clause (xiii) of the Order is
not applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly,
the provisions of clause (xiv) of the Order is not applicable to the
company.
(xv) In our opinion, the company has not given guarantee for loans
taken by others from banks or fnancial institutions.
(xvi) The company has not obtained any fresh term loans during the year
under review. Accordingly, the provisions of clause (xvi) of the Order
are not applicable to the company.
(xvii) As per the information and explanations given to us and on an
overall examination of the Balance Sheet of company, we are of the
opinion that the company has not utilized short-term funds for long
term purposes.
(xviii)During the year the company has not made preferential allotment
of shares to parties and companies covered in the register maintained
under section 301 of the Act.
(xix) According to the information and explanations given to us, the
company has not issued debentures during the year.
(xx) According to the information and explanations given to us, during
the year the company has not raised any money by public issue.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For B.K.Shroff & Co.
Chartered Accountants
Reg. No. : 302166E
O.P. Shroff
Partner
Mumbai, 24 th May 2013 Membership Number 6329
Mar 31, 2012
1. We have audited the attached Balance Sheet of Pranavaditya Spinning
Mills Limited as at 31st March, 2012 and also the annexed Profit & Loss
Account and the cash flow statement of the company for the year ended
in the that date. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956 and on the basis of such checks of books and records of the
Company as are considered appropriate and on the basis of information
and explanations given to us during the course of our audit, we enclose
in the annexure a statement on the matters specified in Paragraphs 4
and 5 of the said order to the extent applicable to the company.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of the
books.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by the report are in agreement with the books of account.
iv) In our opinion and to the best of our information, the Balance
Sheet, Profit and loss Account and Cash Flow Statement comply with the
Accounting Standards referred to in section 211(3C) of the Companies
Act, 1956.
v) On the basis of written representations made by the Directors as on
March 31, 2012 and taken on record by the Board of Directors of Company
and information and explanations given to us, none of the Directors is
prima-facia disqualified as on March 31, 2012 from being appointed as a
director in terms of clause (g) of the sub-section (1) of section 274
of the Companies Act, 1956
vi) In our opinion and to the best of our information and according to
the explanations given to us the said accounts give the information
required by the Companies Act, 1956, in the manner so required and
present a true and fair view in conformity with the accounting
principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2012;
b. in the case of the Profit and Loss Account, of the loss for the
year ended on that date; and
c. in the case of cash flow statement of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date
i. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management according to a regular program, which, in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies with respect to book records were
noticed on such verification.
(c) During the year, the company has not disposed off any substantial
part of its fixed assets. Therefore, it has not affected the going
concern concept of the company.
ii. (a) Physical verification of inventory (except material in
transit) has been conducted by the management at reasonable intervals.
In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and nature of its business.
(c) The company is maintaining proper records of inventory.
Discrepancies noticed on verification of inventory as compared to book
records were not material
iii. According to the information and explanations given to us, the
company has not granted any loans during the year to the parties
covered in the register maintained under section 301 of the Companies
Act, 1956.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory and fixed assets and for sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal control system.
v. Transactions that need to be entered in the register maintained
under section 301 of the Companies Act, 1956 :
(a) Based upon the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in section 301
of the Companies Act, 1956, have been entered in the register required
to be maintained under the section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the registered maintained section 301 of the
Companies Act, 1956 and exceeding the value of Rs. .5,00,000/- in respect
of any party during the year, have been made at prices which are
reasonable, having regard to prevailing market prices at the relevant
time.
vi. According to the information and explanation given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of clause 4 (vi) of the Order are not applicable to the
Company.
vii. In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
ix. (a) The company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees state
insurance, income tax, wealth tax, sales tax, service tax, custom duty,
excise duty, cess and other statutory dues applicable to it.
(b) Dues on account of penalty levied by excise authorities amounting
to Rs. 1 lac for the earlier year have not been deposited and appeal for
the same is pending before CESTAT. There are no dues in the nature of
sales tax, income tax, custom duty, wealth tax, excise duty and cess
which are disputed and outstanding.
(x) The accumulated losses of the company as at 31st March, 2011 do not
exceed fifty percent of its net worth at the end of the said financial
year. The company has incurred cash losses during the financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders.
(xii) According to the information and explanations given to us, the
company has not granted any loan and advance on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence clause 4 (xii) of the Order is
not applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly,
the provisions of clause 4 (xiv) of the Order is not applicable to the
company.
(xv) In our opinion, the company has not given guarantee for loans
taken by others from banks or financial institutions.
(xvi) The company has not obtained any fresh term loans during the year
under review. Accordingly, the provisions of clause 16 of Para 4 of the
Companies (Auditors' Report) Order are not applicable to the company.
(xvii) As per the information and explanations given to us and on an
overall examination of the Balance Sheet of company, we are of the
opinion that the company has utilized Rs. 122.43 lac raised during the
year on short-term basis for long term purposes.
(xviii) During the year the company has not made preferential allotment
of shares to parties and companies covered in the register maintained
under section 301 of the Act.
(xix.) According to the information and explanations given to us, the
company has not issued debentures during the year.
(xx) According to the information and explanations given to us, during
the year the company has not raised any money by public issue.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For B.K. SHROFF & CO.
Chartered Accountants
Reg. No. 302166E
O. P. Shroff
Place : Mumbai Partner
Date : 25th May 2012 Membership No. 6329
Mar 31, 2010
1. We have audited the attached Balance Sheet of Indo Count Industries
Limited as at 31st March, 2010 and the Profit & Loss Account for the
year ended on that date annexed thereto and the cash flow statement for
the year ended on that date. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the accounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order 2003 and the
Companies (Auditors Report) (Amendment) Order, 2004 issued by the
Central Government of India in terms of sub-section (4A) of section 227
of the Companies Act 1956, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
iii) The Balance Sheet, the Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
iv) In our opinion, subject to our observation in para v) below the
Balance Sheet, the Profit & Loss Account and the Cash Flow Statement
comply with the accounting standards referred to in sub- section (3C)
of section 211 of the Companies Act, 1956.
v) Attention is drawn to Note No. 19 (a) to the accounts regarding the
non provision of MTM loss in the financial statements as AS 30 is not
mandatory.
vi) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that as on
315l March, 2010 none of the Directors is disqualified from being
appointed as a Director in terms of clause (g) of sub section (1) of
section 274 of the Companies Act,1956.
Subject to the above in our opinion and to the best of our information
and according to the explanations given to us, the said accounts give
the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
b. in the case of the Profit & Loss Account, of the loss for the year
ended on that date; and
c. in the case of cash flow statement of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management according to a regular program, which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies with respect to book records were
noticed on such verification.
(c) During the year, the Company has not disposed off any substantial
part of its fixed assets. Therefore, it has not affected the going
concern concept of the Company.
(ii) (a) Physical verification of inventory (except material in
transit) has been conducted by the management at reasonable intervals.
In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) The Company is maintaining proper records of inventory.
Discrepancies noticed on verification of inventory as compared to book
records were not material.
(iii) The Company has neither granted nor taken loans, secured or
unsecured to / from companies firms or other parties covered in the
register maintained under section 301 of the Act and as such clauses
(iii) (b), (iii) (c) and (iii) (d) of the Order are not applicable to
the Company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal control system.
(v) Transactions that need to be entered in the register maintained
under section 301 of the Companies Act, 1956.
a. Based upon the audit procedures applied by us and according to the
information and explanations given to us , we are of the opinion that
the particulars of contracts or arrangements referred to in section 301
of the Companies Act, 1956, have been entered in the register required
to be maintained under the section.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs.5.00 lac in
respect of any party during the year, have been made at prices which
are reasonable, having regard to prevailing market prices at the
relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A of the Companies Act, and its Rules, and also the directives of
Reserve Bank of India. Since the Company has not defaulted in repayment
of deposits, compliance of Section 58AA or obtaining any order from the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal, does not arise.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) The Company is regular in depositing with the appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees state insurance,
income tax, wealth tax, sales tax, service tax, custom duty, excise
duty, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, customs duty, excise duty and cess were outstanding
as at 31-03-2010 for a period of more than six months from the date
they became payable.
(c) According to the records of the Company, dues of income-tax,
wealth-tax, sales tax, service tax, customs duty, excise duty and cess
which have not been deposited on account of any dispute are as under:
Sr. Name of
the statute Nature of the dues Amount Forum where
No. (Rs. in lac) dispute is
pending
1 Central Excise Act Custom Duty / 1.05 CESTAT
Tribunal,
Countervailing Duty Mumbai
2 Central Excise Act Cenvat Credit
availed on 3.89 Commissioner of
Service Tax paid on (Appeals, Central
outward freight (Jan
05 to Jan 07) Excise, Pune)
3 Central Excise Act Cenvat Credit availed
on Service Tax paid 2.96
CESTAT Tribunal
on outward freight
(Feb 07 to Feb 08)
(x) The accumulated losses of the Company as at 31st March, 2010 do not
exceed fifty percent of its net worth at the end of the said financial
year. The Company has not incurred cash losses during the financial
year. However, it had incurred cash losses in the immediately
preceding financial year.
(xi) The Company has defaulted in repayment of dues to banks as under-
Nature of Loan Delay in number of days Amount (Rs. in lac)
Rupee Term loans 0-30 days 5.64
Working Capital Term loans 0-30 days 2.07
Term loans against Forex
losses 0-30 days 2.44
Non Convertible Debentures 0-30 days 1.50
(xii) According to the information and explanations given to us, the
Company has not granted any loan and advance on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence clause 4 (xii) of the Order is
not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly,
the provisions of clause 4 (xiv) of the Order is not applicable to the
Company.
(xv) In our opinion, the Company has not given guarantee for loans
taken by others from banks orfinancial institutions.
(xvi) In our opinion, the term loans have been applied for the purposes
for which they were obtained.
(xvii) During the year the Company has made a preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of the Act.
(xviii) According to the information and explanations given to us, the
Company has not issued debentures during the year.
(xix) According to the information and explanations given to us, during
the year the Company has not raised any money by public issue.
(xx) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B. K. Shroff and Co.
Chartered Accountants
Reg. No. 302166E
O. P. Shroff
Place: Mumbai Partner
Date : 1s June, 2010 Membership No. 6329
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