Mar 31, 2018
Report on the Ind AS financial statements
We have audited the accompanying Ind AS financial statements of SUPER 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, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including Other Comprehensive Income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Rules specified in the Companies (Indian Accounting Standards) Rules, 2017 as amended from time to time. 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 Ind AS 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 Ind AS financial statements based on our audit. In conducting 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 and pronouncement require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS 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 Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, its losses, Other Comprehensive Income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with the Rules specified in the Companies (Indian Accounting Standards) Rules, 2017 as amended from time to time;
e) On the basis of the written representations received from the directors as on 31 st 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 Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting; and
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 as amended, 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 litigation on its financial position in its Ind AS financial statements included in Note No. 40 forming part of the Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order 2016 (âthe orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Bâ statement on the matters specified in paragraphs 3 and 4 of the order to the extent applicable.
Annexure - A to the Independent Auditorsâ Report
(Referred to in paragraph 1(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
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 SUPER SPINNING MILLS LIMITED (âthe Companyâ) as of 31st March 2018 in conjunction with our audit of the Ind AS 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 the 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 issued by the Institute of Chartered Accountants of India (âICAIâ). 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 Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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 Ind AS 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS 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 (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the Ind AS 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, to the best of our information and according to the explanations given to us, 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 the 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 issued by the Institute of Chartered Accountants of India.
ANNEXURE âBâ TO THE INDEPENDENT AUDITORâS REPORT
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date to the members of SUPER SPINNING MILLS LIMITED for the year ended 31st March, 2018)
We report that:
i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of the immovable properties are held in the name of the company.
ii) (a) In our opinion and according to the information and explanations given to us, the management has conducted the physical verification of inventories at reasonable intervals during the year under review.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.
(c) According to the information and explanations given to us, we are of the opinion that the Company is maintaining proper records of inventories and no material discrepancies were noticed on their physical verification.
iii) (a) The Company had not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 during the year. Hence, comments on the provisions of clause (iii) (a) to (c) of the said Order do not arise.
iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, guarantees and investments made.
v) In our opinion and according to the information and explanations given to us, during the year, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Companies Act, 2013, and rules framed there under.
vi) We have broadly reviewed the books of account maintained by the company, pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 as amended and are of the opinion that prima-facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.
vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of accounts in respect of undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, goods and service tax, sales-tax, excise duty, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have been regularly deposited during the year by the company with appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March 2018 outstanding for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us, the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authority are as under:
Name of Statute |
Nature of Dues |
Issues in the Appeal |
Unpaid Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum Where Dispute is Pending |
Income Tax Act, 1961 |
Income Tax |
Disallowance of replacement of machinery |
523.74 |
1993-1999 2000-2004 2004-2005 2005-2009 2011-12 |
CIT(Appeals), Coimbatore CIT(Appeals), Coimbatore ITAT, Chennai CIT(Appeals), Coimbatore CIT(Appeals), Coimbatore |
APGST Act, 1957 |
Sales Tax |
Disallowance of Stock Transfer to branch & Tax due on other pending declaration forms |
162.96 |
2010-11 |
STAT, Visakhapatnam |
APGST Act, 1957 |
Sales Tax |
Disallowance of Stock Transfer to branch & Tax due on other pending declaration forms |
432.00 |
2011-12 |
STAT, Visakhapatnam |
TNGST Act, 1959 |
Sales Tax |
Levy of Penalty for Issue of C Forms |
83.93 |
1998-99 |
Madras High Court, Chennai |
TNGST Act, 1959 |
Sales Tax |
Rate Difference |
149.42 |
2004-2008 |
Madras High Court, Chennai |
TNGST Act, 1959 |
Sales Tax |
CST Rate Difference |
0.31 |
2010-11 |
Appellate Deputy Commissioner of Commercial Taxes, Coimbatore |
Central Excise Act, 1944 |
Excise Duty |
Capital goods moved without payment of duty |
49.61 |
2007-08 |
CESTAT, Chennai |
viii) The company has not defaulted in repayment of loans and borrowing to financial institution, bank, government or dues to debenture holders.
ix) The company has not raised any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.
x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable Indian accounting standards (Ind AS).
xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For M/s Sethia, Prabhad Hegde & Co
Chartered Accountants
Registration No. 013367S
Timmayya Hegde
Coimbatore Partner
May 19, 2018 Membership No. 226267
Mar 31, 2016
To
The Members of Super Spinning Mills Limited,
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of SUPER SPINNING MILLS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone 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 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.
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 and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncement 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 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 basis for our audit opinion on the standalone financial statements.
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, its losses and its cash flows for the year ended on that date.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order 2016 (âthe orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ statement on the matters specified in paragraphs 3 and 4 of the order to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the 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 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; and:
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 litigation on its financial position in its financial statements included in Note No. 29.2 to the financial statements
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
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 the Independent Auditors'' Report
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date to the members of SUPER SPINNING MILLS LIMITED for the year ended March 31, 2016)
We report that:
i. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of the immovable properties are held in the name of the company.
ii) (a) In our opinion and according to the information and explanations given to us, the management has conducted the physical verification of inventories at reasonable intervals during the year under review.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.
(c) According to the information and explanations given to us, we are of the opinion that the Company is maintaining proper records of inventories and no material discrepancies were noticed on their physical verification.
iii) The Company had not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 during the year. Hence, comments on the provisions of clause (iii) (a) to (c) of the said Order do not arise.
iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, guarantees and investments made.
v) In our opinion and according to the information and explanations given to us, during the year, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Companies Act, 2013, and rules framed there under.
vi) We have broadly reviewed the books of account maintained by the company, pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Companies Act, 2013 and are of the opinion that prima-facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.
vii) (a) According to the information and explanations given
to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of accounts in respect of undisputed
statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, excise duty, wealth-tax, service tax, customs duty, excise duty, Value added tax, cess and other material statutory dues have been regularly deposited during the year by the company with appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March 2016 outstanding for a period of more than six months from the date they become payable.
b) According to the information and explanations given to us, the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authority are as under:
Name of Statute |
Nature of Dues |
Issues in the Appeal |
Unpaid Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum Where Dispute is Pending |
Income Tax Act, 1961 |
Income Tax |
Disallowance of replacement of machinery |
489.16 |
1993-94, 1994-95, 1996-97, 1998-99 to 2000-01, 2002-03 to 2008-09 |
CIT(Appeals), Coimbatore |
APGST Act, 1957 |
Sales Tax |
Disallowance of Stock Transfer to branch & Tax due on other pending declaration forms |
162.96 |
2010-11 |
ADC, Kurnool & STAT, Visakhapatnam |
TNGST Act, 1959 |
Sales Tax |
Levy of Penalty for Issue of C Forms |
83.93 |
1998-99 |
High Court, Chennai |
Central Excise Act,1944 |
Excise Duty |
Capital goods moved without payment of duty and Dispute on input duty assessed |
75.98 |
2003-04 |
Commissioner of Appeals, Coimbatore |
viii) The company has not defaulted in repayment of loans and borrowing to financial institution, bank, government or dues to debenture holders
ix) The company has not raised any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.
x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure - B to the Auditorsâ Report 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 SUPER SPINNING MILLS LIMITED (âthe Companyâ) as of 31 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 Company''s management is responsible for establishing and maintaining internal financial controls based on the 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 issued by the Institute of Chartered Accountants of India (''ICAI''). 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 Companies Act, 2013.
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 on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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 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 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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 (3) 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 31 March 2016, based on the 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 issued by the Institute of Chartered Accountants of India.
For Reddy, Goud & Janardhan
Chartered Accountants
Registration No.003254S
Balakrishna S Bhat
Coimbatore Partner
30th May, 2016 Membership No.202976
Mar 31, 2015
We have audited the accompanying standalone financial statements of
SUPER SPINNING MILLS LIMITED ("the Company"), which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Managements Responsibility for the standalone 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 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 judgements 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 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 thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountant Of India. Those Standards and pronouncement 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 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, but not for the purpose of expressing
an opinion on whether the company has in place adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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 basis for our audit opinion on the standalone
financial statements.
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, 2015, and its losses and its 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 2015 ("the
order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the order
to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the 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, 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) of the
Act.
f) 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 included in Note No. 28
to the financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
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 the Independent Auditors' Report (Referred to in
paragraph 1 under 'Report on Other Legal and Regulatory Requirements'
section of our report of even date to the members of SUPER SPINNING
MILLS LIMITED for the year ended March 31,2015)
We report that:
i. a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. b) The Company has a regular programme of physical
verification of its fixed assets by which fixed assets are verified in
a phased manner over a period of three years. In accordance with this
programme, certain fixed assets were verified during the year and no
material discrepancies were noticed on such verification. In our
opinion, this periodicity of physical verification is reasonable having
regard to the size of the Company and the nature of its assets.
ii. a) In our opinion and according to the information and explanations
given to us, the management has conducted the physical verification of
inventories at reasonable intervals during the year under review.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) According to the information and explanations given to us, we are of
the opinion that the Company is maintaining proper records of
inventories and no material discrepancies were noticed on their
physical verification.
iii. a) The Company had not granted any loans, secured or unsecured to
any companies, firms or other parties covered in the register
maintained under section 189 of the Companies Act, 2013 during the
year, except in case of interest free unsecured loans granted to its
subsidiaries during previous years that were outstanding at the
beginning of the year were repaid in full during the current year.
Hence comments on the provisions of Clause (iii) (a) to (c) of the said
order do not arise.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business, with
regard to the purchase of inventories and fixed assets and for the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
v. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit within the
meaning of Section 73 to 76 of the Companies Act, 2013, and rules
framed there under.
vi. We have broadly reviewed the books of account maintained by the
company, pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 148 (1) of the Companies Act,
2013 and are of the opinion that prima-facie, the specified accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determining whether
they are accurate or complete.
vii. a) According to the information and explanations given to us and
on the basis of our examination of the records of the company, amounts
deducted/accrued in the books of accounts in respect of undisputed
statutory dues including provident fund, employees' state insurance,
income-tax, sales-tax, excise duty, wealth-tax, service tax, customs
duty, excise duty, Value added tax, cess and other material statutory
dues have been regularly deposited during the year by the company with
appropriate authorities. There are no undisputed statutory dues as
referred to above as at 31st March 2015 outstanding for a period of
more than six months from the date they become payable.
b) According to the information and explanations given to us, the
disputed statutory dues that have not been deposited on account of
matters pending before the appropriate authority are as under:
Name of Nature of Issues in the Unpaid
Amount
Statute Dues Appeal (Rs.in
lakhs)
Disallowance of
Income Tax Act, Income Tax replacement of 439.92
1961 machinery
Disallowance of
APGST Art Stock Transfer to
Sales Tax branch & Tax due 162.96
1957 on other pending
declaration forms
TNGST Act, Levy of Penalty for
Sales Tax 83.93
1959 Issue of C Forms
Capital goods moved
Central Excise without payment of
Excise Duty 75.98
Act,1944 duty and Dispute on
input duty assessed
Name of
Statute Period to Forum
which the
Where Dispute
amount
is Pending
relates
Income Tax Act,
1961 1993- 94,
1994- 95,
1996-97,
1998-99 to CIT
2002-03 to
2008-09
APGST Act,
1957 ADC, Kurnool
2010-11 & STAT,
Visakhapatnam
TNGST Act,
1959 1998-99 High Court, Chennai
Central Excise
Act,1944 Commissioner of
2003-04 Appeals, Coimbatore
(c) According to the information and explanations given to us, the
amount required to be transferred to Investor Education and Protection
Fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such
fund within time.
viii) The Company has incurred accumulated losses aggregating to Rs.
4543.11 lakhs as at end of the financial year and has incurred cash
losses of Rs. 678.39 lakhs in the current financial year. However, the
Company has not incurred cash losses during the immediately preceding
financial year.
ix) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks or financial
institutions. There are no debenture holders during the year.
x) In our opinion, the Company has given guarantees for banking
facility availed by a subsidiary company for Rs. 140 Lakhs and according
to the information and explanations given to us, the terms and
conditions on which such guarantees have been given to such entities
are not prima facie prejudicial to the interest of the company,
considering the Company's economic interest in such entities.
xi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For Reddy, Goud & Janardhan
Chartered Accountants
Registration No.003254S
Coimbatore Balakrishna S Bhat
7th May, 2015 Partner
Membership No.202976
Mar 31, 2014
We have audited the accompanying financial statements of Super Spinning
Mills Limited, which comprise the Balance Sheet as at March 31, 2014,
and 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 sub-section (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. 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. 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 March 31, 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 the Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 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
a) 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
b) 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
c) 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
d) 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 Companies Act, 1956 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
e) on the basis of written representations received from the directors
as on March 31, 2014, and taken
on record by the Board of Directors, none of the directors are
disqualified as on March 31, 2014, from being appointed as a director
in terms of clause (g) of sub-section (1) of section 274 of the
Companies Act, 1956
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure referred to in paragraph 1 of our report of even date
1. a. The Company has maintained proper records
showing full particulars including quantitative details and situation
of fixed assets.
b. The assets have been physically verified by the management during
the year in accordance with a phased programme of verification, which,
in our opinion is reasonable, considering the size and the nature of
its assets.
c. The Company has not disposed off any substantial part of the fixed
assets during the year.
2. a. The inventories have been physically verified during the year
by the management. In our opinion the frequency of verification is
reasonable.
b. In our opinion, and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c. The company is maintaining proper records of inventories. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. a. The company has not granted any loans/advances during the year
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. An amount of Rs.79.57
lakhs is outstanding at the year end.
b. The rate of interest and other terms and conditions on which the
loans/advances have been made to parties covered under Section 301 of
the Companies Act, 1956 are not prima facie, prejudicial to the
interest of the company.
c. According to the information and explanations given to us, the
receipt of loans/advances and the interest amount are regular as
stipulated.
d. According to the information and explanations given to us, there
are no overdue amounts with respect to the above said loans/advances
and as such Clause (d) is not applicable.
e. According to the information and explanations given to us, the
Company has not received any secured or unsecured loans during the year
from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. An amount of
Rs.35.00 lakhs is outstanding at year end.
f. The interest and other terms and conditions on which these loans
have been borrowed are not prima facie, prejudicial to the interests of
the company.
g. The repayment of principal and interest are regular as stipulated.
4. 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 with regard to the purchases of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control.
5. a. According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered into the registers maintained under Section 301
of the Companies Act, 1956, have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions
made in pursuance of such contracts or arrangements have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time.
6. In our opinion and according to information and explanations given
to us, the company has complied with the provision of Section 58A, 58AA
or any other relevant provisions of the Companies Act, 1956 and the
rules framed there under.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the company and nature of its business.
8. We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the m ai n t e
nance of cos t re c or ds u n der 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.
9. a. According to the information and explanations given to us and
based on the examination of books of account and records produced
before us, we are of the opinion that the undisputed statutory dues
including Provident Fund, Investors Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service
tax, Customs Duty, Excise Duty, Cess and other material statutory dues
as applicable, have been regularly deposited by the company during the
year with the appropriate authorities.
b. As at 31st March 2014, according to the records of the Company and
the information and explanations given to us, the particulars of
disputed dues (provided / considered contingent liability, as
appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales
Tax, Customs Duty, Excise Duty and Cess wherever applicable that have
not been deposited on account of a dispute are tabulated as in clause
(c).
c. According to the information and explanations given to us and as
per the records of the company the dues of sales tax/income tax/
customs duty / wealth tax/service tax / excise duty / cess, which have
not been deposited on account of any dispute, are as follows:
Sl No Name of Statute Issues in the Appeal Unpaid
Amount
in Lakhs
1 Income Tax Disallowance of 480.55
replacement of
machinery
2 APGST Disallowance of purchase 50.78
tax credit taken to
set off tax collected on
yarn sales
3 TNGST Levy of Penalty for
Issue of 83.93
C Forms
4 Central Excise, TN Capital goods
moved without 75.98
payment of duty and
Dispute on input duty
assessed
Name of Statute
Income Tax
APGST
TNGST
Central Excise, TN
Name of the Statue Period to Forum Where
which Dispute is pending
the amount
relates
Income Tax 1993-94, CIT(A), Coimbatore
1994-95,
1996-97,
1999-00,
2000-01
2002-03 to
2008-09
APGST 1999-00 to DC(CT)(A), Kurnool
2003-04
TNGST 1998-99 High Court, Chennai
Central Excise, TN 2003-04 Commissioner of
Appeals, Coimbatore
10. There are accumulated losses as at 31st March 2014. The Company has
not incurred any cash losses during the financial year covered by our
audit and the immediately preceding financial year.
11. 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 to a bank. There are no debenture holders
during the year.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of
securities by way of pledge of shares and debentures.
13. In our opinion, the company is not a chit fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore the provisions of clause (xiii) of
para 4 of the Order are not applicable.
14. According to the information and explanations given to us, the
company is not dealing in or trading in any shares and securities and
hence the provisions of Para (xiv) of the order are not applicable.
15. According to the information and explanations given to us, the
Company has given guarantees for loans taken from banks by a subsidiary
company for Rs.140 Lakhs and prima facie, the terms and conditions on
which such guarantees have been extended are not prejudicial to the
interest of the Company.
16.In our opinion and according to the information and explanations
given to us, the term loan(s) have been applied for the purpose for
which they were raised.
17. According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, we report that
no funds raised on short term basis have been used for long term
investments.
18. The company has not made any preferential allotment of shares
during the year and hence the provisions of clause (xviii) of para 4 of
this Order are not applicable.
19. The company has not issued any debentures during the year and hence
the provisions of clause (xix) of para 4 of this Order are not
applicable.
20. The company has not raised any money by way of public issues during
the year and hence the provisions of clause (xx) of para 4 of this
Order are not applicable.
21. During the course of our examination of the books of accounts
carried on in accordance with the generally accepted auditing practices
in India and according to the information and explanations given to us,
we have neither come across any instance of fraud on or by the company,
noticed or reported during the year nor have been informed of such case
by the management.
For Reddy, Goud & Janardhan
Chartered Accountants
Registration No.003254S
Coimbatore Balakrishna S Bhat
28th May, 2014 Partner
Membership No.202976
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Super Spinning
Mills Limited, which comprise the Balance Sheet as at March 31, 2013,
and 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.
Managements 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 sub-section (3C) of Section 211
of the Companies Act, 1956. 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
judgement, including the assessment of the risks of material
misstatement in 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. 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 March 31, 2013;
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 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:
a) 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
b) 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
c) 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
d) 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 Companies Act, 1956
e) on the basis of written representations received from the Directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the Directors are disqualified as on March 31, 2013, from being
appointed as a Director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under Section 441A of the
Companies Act, 1956 nor has it issued any rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company
Annexure referred to in paragraph 1 of our report of even date
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The assets have been physically verified by the management during
the year in accordance with a phased programme of verification, which,
in our opinion is reasonable, considering the size and the nature of
its assets.
c. The Company has not disposed off any substantial part of the fixed
assets during the year.
2. a. The inventories have been physically verified during the year
by the management. In our opinion the frequency of verification is
reasonable.
b. In our opinion, and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c. The company is maintaining proper records of inventories. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. a. The company has not granted any loans/advances during the year
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. An amount of Rs. 808.63
lakhs is outstanding at the year end.
b. The rate of interest and other terms and conditions on which the
loans/advances have been made to parties covered under Section 301 of
the Companies Act, 1956 are not prima facie, prejudicial to the
interest of the company.
c. According to the information and explanations given to us, the
receipt of loans/advances and the interest amount are regular as
stipulated.
d. According to the information and explanations given to us, there
are no overdue amounts with respect to the above said loans/advances
and as such Clause (d) is not applicable.
e. According to the information and explanations given to us, the
Company has not received any secured or unsecured loans during the year
from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. An amount of Rs.
37.11 lakhs is outstanding at year end.
f. The interest and other terms and conditions on which these loans
have been borrowed are not prima facie, prejudicial to the interests of
the company.
g. The repayment of principal and interest are regular as stipulated.
4. 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 with regard to the purchases of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control.
5. a. According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered into the registers maintained under Section 301
of the Companies Act, 1956, have been so entered. b. In our opinion
and according to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements have
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time.
6. In our opinion and according to information and explanations given
to us, the company has complied with the provision of Section 58A, 58AA
or any other relevant provisions of the Companies Act, 1956 and the
rules framed there under.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the company and nature of its business.
8. We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules 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.
9. a. According to the information and explanations given to us and
based on the examination of books of account and records produced
before us, we are of the opinion that the undisputed statutory dues
including Provident Fund, Investors Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service
tax, Customs Duty, Excise Duty, Cess and other material statutory dues
as applicable, have been regularly deposited by the company during the
year with the appropriate authorities.
b. As at 31st March 2013, according to the records of the Company and
the information and explanations given to us, the particulars of
disputed dues (provided / considered contingent liability, as
appropriate) in respect of Income Tax, Wealth Tax,
Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess wherever
applicable that have not been deposited on account of a dispute are
tabulated as in clause ( c ).
c. According to the information and explanations given to us, the
details of disputed statutory dues remaining unpaid and the forum where
the dispute is pending are listed as under:
Rs.lakhs
Sl Name of Demand
Issues in the Appeal
No Statute Amount
1 Income Tax Disallowance of depreciation on
humidification 14.61
plant
2 Income Tax Disallowance of replacement of machinery 70.69
3 Income Tax Disallowance of replacement of machinery 362.27
4 Income Tax Disallowance of Replacement of machinery 241.67
5 Income Tax Computation of book profit for MAT purpose 34.57
6 Income Tax Disallowance of Replacement of machinery 553.68
7 Income Tax Disallowance of replacement of machinery 183.81
8 Income Tax Disallowance of replacement of machinery 42.51
9 Income Tax Disallowance of replacement of machinery 228.80
10 Income Tax Exclusion of 90% insurance and interest 318.92
receipts and miscellaneous income from
Sec 80HHC workings, disallowance of
replaceme of machinery, validity of
assessment u/s 143(3) & deduction of Sec
80IA claim from Sec 80HHC working
11 Income Tax Disallowance of replacement of machinery 230.00
12 Income Tax Disallowance of replacement of machinery 241.31
13 Income Tax Disallowance of replacement of machinery 378.53
14 Income Tax Disallowance of replacement of machinery 113.83
15 Income Tax Disallowance of replacement of machinery 15.37
16 Income Tax Disallowance of Agency Commission on 95.21
export sales, Parties Performance
Incentive, Depreciation on imported
car and ineligible credit as per Form 26AS
17 APGST Disallowance of purchase tax
credit taken to 144.28
set off tax collected on yarn sales
18 TNGST Levy of Penalty for Issue of C Forms 83.93
19 Central Capital goods moved without payment of duty 75.98
Excise, TN and Dispute on input duty assessed
Name Period to Forum Where
which the Dispute is Pending
amount
relates
Income Tax 1989-90 High Court, Chennai
Income Tax 1993-94 High Court, Chennai
Income Tax 1994-95 High Court, Chennai
Income Tax 1996-97 CIT(A), Coimbatore
Income Tax 1997-98 Supreme Cout, New Delhi
Income Tax 1998-99 High Court, Chennai
Income Tax 1999-00 CIT(A), Coimbatore
Income Tax 2000-01 CIT(A), Coimbatore
Income Tax 2002-03 CIT(A), Coimbatore
Income Tax 2003-04 CIT(A), Coimbatore
and High Court, Chennai
Income Tax 2004-05 CIT(A), Coimbatore
Income Tax 2005-06 High Court, Chennai
Income Tax 2006-07 High Court, Chennai
Income Tax 2007-08 High Court, Chennai
Income Tax 2008-09 High Court, Chennai
Income Tax 2010-11 CIT(A), Coimbatore
Income Tax 1999-00 to DC(CT)(A), Kurnool
2003-04
Income Tax 1998-99 High Court, Chennai
Income Tax 2003-04 Commissioner of Appeals, Coimbatore
10. There are accumulated losses and in the current financial year the
company has not incurred cash losses. However, there were cash losses
in the immediately preceding financial year.
11. 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 to a bank. There are no debenture holders
during the year.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of
securities by way of pledge of shares and debentures.
13. In our opinion, the company is not a chit fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore the provisions of clause (xiii) of
para 4 of the Order are not applicable.
14. According to the information and explanations given to us, the
company is not dealing in or trading in any shares and securities and
hence the provisions of Para (xiv) of the order are not applicable.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the term loan(s) have been applied for the purpose for
which they were raised.
17. According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, we report that
no funds raised on short term basis have been used for long term
investments.
18. The company has not made any preferential allotment of shares
during the year and hence the provisions of clause (xviii) of para 4 of
this Order are not applicable.
19. The company has not issued any debentures during the year and hence
the provisions of clause (xix) of para 4 of this Order are not
applicable.
20. The company has not raised any money by way of public issues during
the year and hence the provisions of clause (xx) of para 4 of this
Order are not applicable.
21. During the course of our examination of the books of accounts
carried on in accordance with the generally accepted auditing practices
in India and according to the information and explanations given to us,
we have neither come across any instance of fraud on or by the company,
noticed or reported during the year nor have been informed of such case
by the management.
For Reddy, Goud & Janardhan
Chartered Accountants
Registration No.003254S
Balakrishna S Bhat
Coimbatore Partner
27th May, 2013
Membership No.202976
Mar 31, 2012
We have audited the attached Balance Sheet of Super Spinning Mills
Limited, as at 31st March 2012, the statement of Profit and Loss and
the Cash Flow Statement for the year ended on that date annexed
thereto. 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.
We conducted our audit in accordance with the 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.
1. As required by the Companies (Auditor's Report) Order, 2003 (as
amended), 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.
2. Further to our comments in the Annexure referred to above, we
report that:
a. We have 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 appears from our examination of
those books.
c. The Balance Sheet, the statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d. In our opinion, the Balance Sheet, the statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956.
e. On the basis of written representations received from the
directors, as on 31st March 2012 and taken on record by the Board of
Directors, we report that none of the directors of the Company are
disqualified as on 31st March 2012 from being appointed as Director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956.
f. 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:
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
ii. In the case of the statement of Profit and Loss, of the Loss of
the Company for the year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 1 of our report of even date
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The assets have been physically verified by the management during
the year in accordance with a phased programme of verification, which,
in our opinion is reasonable, considering the size and the nature of
its assets.
c. The Company has not disposed off any substantial part of the fixed
assets during the year.
2. a. The inventories have been physically verified during the year by
the management. In our opinion the frequency of verification is
reasonable.
b. In our opinion, and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c. The company is maintaining proper records of inventories. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. a. The company had made advances to two parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
amount involved in the transaction is Rs. 826.14 Lakhs.
b. No interest is charged with respect to the above advances.
However, other terms and conditions on which advances were made to the
parties covered under Section 301 of the Companies Act, 1956 are not
prima facie, prejudicial to the interest of the company.
c. According to the information and explanations given to us, the
receipt of advance amount is regular as stipulated.
d. According to the information and explanations given to us, there
are no overdue amounts with respect to the above said advances and as
such Clause (d) is not applicable.
e. According to the information and explanations given to us, the
Company had not taken any loans, secured or unsecured, from companies,
firms or other parties as covered in the register maintained under
section 301 of the Companies Act, 1956 and hence the provisions of
clause (iii)(e), clause (iii)(f) and clause (iii)(g) of the said Order
are not applicable.
4. 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 with regard to the purchases of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control.
5. a. According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered into the registers maintained under Section 301
of the Companies Act, 1956, have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
6. In our opinion and according to information and explanations given
to us, the company has complied with the provision of Section 58A, 58AA
or any other relevant provisions of the Companies Act, 1956 and the
rules framed there under.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the company and nature of its business.
8. We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules 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.
9. a. According to the information and explanations given to us and
based on the examination of books of account and records produced
before us, we are of the opinion that the undisputed statutory dues
including Provident Fund, Investors Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service
tax, Customs Duty, Excise Duty, Cess and other material statutory dues
as applicable, have been regularly deposited by the company during the
year with the appropriate authorities.
b. As at 31st March 2012, according to the records of the Company and
the information and explanations given to us, the particulars of
disputed dues (provided / considered contingent liability, as
appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales
Tax, Customs Duty, Excise Duty and Cess wherever applicable that have
not been deposited on account of a disputes are tabulated as in clause
( c ).
c. According to the information and explanations given to us, the
details of disputed statutory dues remaining unpaid and the forum where
the dispute is pending are listed as under:
Rs. Lakhs
Demand Period to which Forum Where
Sl
No Name of
Statute Issues in
the Appeal Amount the amount
relates Dispute is
Pending
1 Income
Tax Disallowance
of depreciation
on
humidification
plant 14.61 1989-90 High Court,
Chennai
2 Income
Tax Disallowance of
replacement of
machinery 70.69 1993-94 CIT(A),
Coimbatore
3 Income
Tax Disallowance of
replacement of
machinery 362.27 1994-95 CIT(A),
Coimbatore
4 Income
Tax Disallowance of
Replacement of
machinery 241.67 1996-97 CIT(A),
Coimbatore
5 Income
Tax Computation of
book profit for
MAT purpose 34.57 1997-98 High Court,
Chennai
6 Income
Tax Disallowance of
Replacement of
machinery 553.68 1998-99 CIT(A),
Coimbatore
7 Income
Tax Disallowance of
replacement of
machinery 183.81 1999-00 CIT(A),
Coimbatore
8 Income
Tax Disallowance of
replacement of
machinery 42.51 2000-01 CIT,
Coimbatore
9 Income
Tax Disallowance of
replacement of
machinery 228.80 2002-03 CIT(A),
Coimbatore
10 Income
Tax Exclusion of 90%
insurance and
interest
receipts, 318.92 2003-04 CIT(A),
Coimbatore
miscellaneous
income,
disallowance of
replacement of
and High Court,
machinery,
validity of
assessment u/s
143(3) &
deduction Madras
of Sec
80IA claim
from the
deduction of
Sec 80HHC
11 Income
Tax Disallowance of
replacement of
machinery 230.00 2004-05 CIT(A),
Coimbatore
12 Income
Tax Disallowance of
replacement of
machinery &
Deduction 251.84 2005-06 CIT(A),
Coimbatore
u/s Sec 80IA
13 Income
Tax Disallowance of
replacement of
machinery 378.53 2006-07 CIT(A),
Coimbatore
14 Income
Tax Disallowance of
replacement of
machinery,
Deduction u/s 131.36 2007-08 CIT(A),
Coimbatore
80IA,
Disallowance of
cost of
acquisition
while computing
long term
capital gain,
disallowance of
depreciation on
windmills
15 Income
Tax Disallowance of
replacement of
machinery 15.37 2008-09 CIT(A),
Coimbatore
16 TNGST
Act Levy of Penalty
for Issue of
C Forms 83.93 1998-99 High Court,
Madras
17 Central
Excise, Capital goods
moved without
payment of
duty and 75.98 2003-04 Commissioner
of
Tamil
Nadu Dispute on input
duty assessed Appeals,
Coimbatore
10. There are accumulated losses and in the current financial year the
company has incurred cash losses. However, there were no cash losses in
the immediately preceding financial year.
11. 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 to a bank. There are no debenture holders
during the year.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of
securities by way of pledge of shares and debentures.
13. In our opinion, the company is not a chit fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore the provisions of clause (xiii) of
para 4 of the Order are not applicable.
14. According to the information and explanations given to us, the
company is not dealing in or trading in any shares and securities and
hence the provisions of Para (xiv) of the order are not applicable.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the term loan(s) have been applied for the purpose for
which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short term basis have been used for long term
investments.
18. The company has not made any preferential allotment of shares
during the year and hence the provisions of clause (xviii) of para 4 of
this Order are not applicable.
19. The company has not issued any debentures during the year and
hence the provisions of clause (xix) of para 4 of this Order are not
applicable.
20. The company has not raised any money by way of public issues
during the year and hence the provisions of clause (xx) of para 4 of
this Order are not applicable.
21. During the course of our examination of the books of accounts
carried on in accordance with the generally accepted auditing practices
in India and according to the information and explanations given to us,
we have neither come across any instance of fraud on or by the company,
noticed or reported during the year nor have been informed of such case
by the management.
For Reddy, Goud & Janardhan
Chartered Accountants
Registration No.003254S
Balakrishna S Bhat
Coimbatore Partner
22nd May, 2012 Membership No.202976
Mar 31, 2011
We have audited the attached Balance Sheet of Super Spinning Mills
Limited, as at 31 st March 2011, the Profit and Loss Account and the
Cash Flow Statement for the year ended on that date annexed thereto.
Thesefinancial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statementbased on our Audit.
We conducted our audit in accordance with the 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.
1. As required by the Companies (Auditor's Report) Order, 2003 (as
amended), 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.
2. Further to our comments in the Annexure referred to above, we
report that:
a. We have 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 appears from our examination of
those books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in Sub-section (3C) of Section 211 of the
Companies Act, 1956.
e. On the basis of written representations received from the
directors, as on 31st March 2011 and taken on record by the Board of
Directors, we report that none of the directors of the Company are
disqualified as on 31" March 2011 from being appointed as Director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956.
f. 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:
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2011;
ii. In the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 1 of our report of even date
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The assets have been physically verified by the management during
the year in accordance with a phased programme of verification, which,
in our opinion is reasonable, considering the size and the nature of
its assets. c. The Company has not disposed off any substantial part
of the fixed assets during the year.
2. a. The inventories have been physically verified during the year
by the management. In our opinion the frequency of verification is
reasonable.
b. In our opinion, and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c. The company is maintaining proper records of inventories. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. a. The company had made advances to two parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
amount involved in the transaction is Rs.952.23 Lakhs.
b. No interest is charged with respect to the above advances. However,
other terms and conditions on which advances were made to the
parties covered under Section 301 of the Companies Act, 1956 are not
prima facie, prejudicial to the interest of the company.
c. According to the information and explanations given to us, the
receipt of advance amount is regular as stipulated.
d. According to the information and explanations given to us, there
are no overdue amounts with respect to the above said advances and as
such Clause (d) is not applicable.
e. According to the information and explanations given to us, the
Company had not taken any loans, secured or unsecured, from companies,
firms or other parties as covered in the register maintained under
section 301 of the Companies Act, 1956 and hence the provisions of
clause (iii)(e), clause (iii)(f) and clause (iii)(g) of the said Order
are not applicable.
4. 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 with regard to the purchases of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control.
5. a. According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered into the registers maintained under Section 301
of the Companies Act, 1956, have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
6. In our opinion and according to information and explanations given
to us, the company has complied with the provision of Section 58A, 58AA
or any other relevant provisions of the Companies Act, 1956 and the
rules framed there under.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the company and nature of its business.
8. We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules 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.
9. a. According to the information and explanations given to us and
based on the examination of books of account and records produced
before us, we are of the opinion that the undisputed statutory dues
including Provident Fund, Investors Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service
tax, Customs Duty, Excise Duty, Cess and other material statutory dues
as applicable, have been regularly deposited by the company during the
year with the appropriate authorities.
b. As at 31st March 2011, according to the records of the Company and
the information and explanations given to us, the particulars of
disputed dues (provided / considered contingent liability, as
appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales
Tax, Customs Duty, Excise Duty and Cess wherever applicable that have
not been deposited on account of a disputes are tabulated as in clause
( c).
c. According to the information and explanations given to us, the
details of disputed statutory dues remaining unpaid and the forum where
the dispute is pending are listed as under:
Name of Issues in the Appeal Amount Period to
statute which the
amount
relates
Income Tax Disallowance of depreciation 14.61 1989-90
on humidification plant
Income Tax Disallowance of replacement 70.69 1993-94
of machinery
Income Tax Disallowance of replacement 362.27 1994-95
of machinery
Income Tax Disallowance of replacement 241.67 1996-97
of machinery
Income Tax Computation of book profit 34.57 1997-98
for MAT Purpose
Income Tax Disallowance of replacement 553.68 1998-99
of machinery
Income Tax Disallowance of replacement 183.81 1999-00
of machinery
Income Tax Disallowance of replacement 42.51 2000-01
of machinery
Income Tax Disallowance of replacement 228.80 2002-03
of machinery
Income Tax Exclusion of 90% insurance 318.92 2003-04
and interest receipt,
miscellaneous income,
Disallowance of replacement
of machinery validity of
assessment u/s 143(3) &
deduction of Sec 80IA claim
from the deduction of Sec
80HHC
Income Tax Disallowance of replacement 230.00 2004-05
of machinery
Income Tax Disallowance of replacement 251.84 2005-06
of machinery & Deduction u/s
Sec 80IA
Income Tax Disallowance of replacement 378.53 2006-07
of machinery
Income Tax Disallowance of replacement 131.36 2007-08
of machinery, Deduction u/s
80IA, Disallowance of cost of
acquisition while computing
long term capital gain,
disallowance of depreciation
on windmills
Income Tax Disallowance of replacement 15.37 2008-09
of machinery
TN General Levy of Penalty for Issue of 83.93 1998-99
Sales C Forms Tax
Act
Central Rebate claim on Exports 14.20 2004-05
Excise, TN & 2005-06
Central Valuation of Cotton Yarn sent 273.06 2000-01,
Excise, TN to other units, Deemed cenvat 2001-02,
credit - opening stock & 2002-03
Capital goods moved without & 2003-04
payment of duty and Dispute
on input duty assessed
Service Tax Service Tax on Lorry Freight 0.31 2006-07
- availment of abatement
Name of Forum where
statute dispute is pending
Income Tax High Court, Chennai
Income Tax CIT(A) Coimbatore
Income Tax CIT(A) Coimbatore
Income Tax CIT(A) Coimbatore
Income Tax High Court, Chennai
Income Tax CIT(A) Coimbatore
Income Tax CIT(A) Coimbatore
Income Tax CIT Coimbatore
Income Tax CIT(A) Coimbatore
Income Tax CIT(A) Coimbatore
and High Court Madras
Income Tax CIT(A), Coimbatore
Income Tax ACIT & ITAT, Chennai
Income Tax ACIT, Coimbatore
Income Tax CIT(A), Coimbatore
Income Tax CIT(A), Coimbatore
TN General High Court, Madras
salesTax Act
Central Excise, CESTAT, Chennai
TN
Central Excise Commissioner of
T N Appeals, Coimbatore
Service Tax Asst. Commissioner
Tirupur
10. There are accumulated losses. The company has not incurred cash
losses in the current Financial year and in the immediately preceding
Financial year.
11. 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 to a bank. There are no debenture holders
during the year.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of
securities by way of pledge of shares and debentures.
13. In our opinion, the company is not a chit fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore the provisions of clause (xiii) of
para 4 of the Order are not applicable.
14. According to the information and explanations given to us, the
company is not dealing in or trading in any shares and securities and
hence the provisions of Para (xiv) of the order are not applicable.
15. According to the information and explanations given to us. The
company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the term loan(s) have been applied for the purpose for
which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short term basis have been used for long term
investments.
18. The company has not made any preferential allotment of shares
during the year and hence the provisions of clause (xviii) of para 4 of
this Order are not applicable.
19. The company has not issued any debentures during the year and
hence the provisions of clause (xix) of para 4 of this Order are not
applicable.
20. The company has not raised any money by way of public issues
during the year and hence the provisions of clause (xx) of para 4 of
this Order are not applicable.
21. During the course of our examination of the books of accounts
carried on in accordance with the generally accepted auditing practices
in India and according to the information and explanations given to us,
we have neither come across any instance of fraud on or by the company,
noticed or reported during the year nor have been informed of such case
by the management.
For Reddy, Goud & Janardhan
Chartered Accountants
Registration No. 003254S
Balakrishna S Bhat
Partner
Membership No.202976
Coimbatore
26th May, 2011
Mar 31, 2010
The Members of Super Spinning Mills Limited, We have audited the
attached Balance Sheet of Super Spinning Mills Limited, as at 31st
March 2010, the Profit and Loss Account and the Cash Flow Statement for
the year ended on that date annexed thereto. 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.
We conducted our audit in accordance with the 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.
1. As required by the Companies (Auditors Report) Order, 2003 (as
amended), 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.
2. Further to our comments in the Annexure referred to above, we
report that:
a. We have 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 appears from our examination of
those books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in Sub-section (3C) of Section 211 of the
Companies Act, 1956.
e. On the basis of written representations received from the
directors, as on 31st March 2010 and taken on record by the Board of
Directors, we report that none of the directors of the Company is
disqualified as on 31st March 2010 from being appointed as Director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956.
f. 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:
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
ii. In the case of the Profit and Loss Account,
of the profit the Company for the year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 1 of our report of even date
1.a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The assets have been physically verified by the management during
the year in accordance with a phased programme of verification, which,
in our opinion is reasonable, considering the size and the nature of
its assets.
c. The Company has not disposed off any substantial part of the fixed
assets during the year.
2. a. The inventories have been physically verified during the year
by the management. In our opinion the frequency of verification is
reasonable.
b. In our opinion, and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c. The company is maintaining proper records of inventories. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. a. The company had made advances to eight parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
amount involved in the transaction is Rs.2,919 Lakhs. b. No interest
is charged with respect to the above advances. However, the other
terms and conditions on which advances were made to the parties covered
under Section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the company.
c. According to the information and explanations given to us, the
receipt of advance amount is regular as stipulated.
d. According to the information and explanations given to us, there
are no overdue amounts with respect to the above said advances such
Clause (d) is not applicable.
e. According to the information and explanations given to us, the
Company had not taken any loans, secured or unsecured, from companies,
firms or other parties as covered in the register maintained under
section 301 of the Companies Act, 1956 and hence the provisions of
clause (iii)(e), clause (iii)(f) and clause (iii)(g) of the said Order
are not applicable.
4. 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, with regard to the purchases of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control.
5. a. According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered into the registers maintained under Section 301
of the Companies Act, 1956, have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts
or arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
6. In our opinion and according to information and explanations given
to us, the company has complied with the provision of Section 58A, 58AA
or any other relevant provisions of the Companies Act, 1956 and the
rules framed there under.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the company and nature of its business.
8. We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules 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.
9. a. According to the information and explanations given to us and
based on the examination of books of account and records produced
before us, we are of the opinion that the undisputed statutory dues
including Provident Fund, Investors Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service
tax, Customs Duty, Excise Duty, Cess and other material statutory dues
as applicable, have been regularly deposited by the company during the
year with the appropriate authorities.
b. As at 31st March 2010, according to the records of the Company and
the information and explanations given to us, the particulars of
disputed dues (provided / considered contingent liability, as
appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales
Tax, Customs Duty, Excise Duty and Cess wherever applicable that have
not been deposited on account of a disputes are tabulated as in
clause(c).
c. According to the information and explanations given to us, the
details of disputed statutory dues remaining unpaid and the forum where
the dispute is pending are listed as under:
Name of
Issues in the Appeal
statute
Income Tax Disallowance of depreciation on humidification plant
Income Tax Disallowance of Bonus
Income Tax Disallowance of replacement of machinery
Income Tax Payment to AP Electricity Board and disallowance of
bonus provision under MAT Income Tax Disallowance of
replacement of machinery
Income Tax Disallowance of depreciation
Income Tax Disallowance of replacement of machinery
Income Tax Disallowance of replacement of machinery
Income Tax Levy of interest u/s 234D
Income Tax Validity of assessment, exclusion of 90% interest income
for section 80HHC Income Tax Deduction u/s 80IA
Income Tax Allowance of bad debts
Income Tax Disallowance of replacement of machinery &
deduction u/s 80IA Income Tax Disallowance of
replacement of machinery
Income Tax Disallowance of replacement of machinery, deduction
u/s 80IA, disallowance of cost of acquisition of land
for Long term capital gain & disallowance of depreciation
on windmills
The Andhra
Pradesh Disallowance of Purchase Tax Credit
taken to set off tax
Govt. Sales
Tax Act collected on Yarn Sales
TN General Sales Levy of Penalty for Issue of C Forms
Tax Act
Central
Excise.TN Rebate Claim on Exports
Central
Excise. TN Valuation of Cotton Yarn sent to other units, Deemed
cenvat credit à opening stock & Capital goods moved
without payment of
duty
Service Tax Service Tax on Lorry Freight à availment of abatement
Name of Amount Period to which Forum where
statute
the amount relates dispute is pending
Income Tax 14.61 1988 - 89 High Court, Chennai
Income Tax 33.30 1994 - 95 ACIT Coimbatore
Income Tax 241.67 1995 - 96 CIT(A) Coimbatore
Income Tax 76.87 1997 - 98 High Court, Chennai
Income Tax 183.81 1998 - 99 CIT(A) Coimbatore
Income Tax 66.03 1999 - 00 ACIT Coimbatore
Income Tax 42.51 1999 - 00 CIT(A) Coimbatore
Income Tax 228.80 2001 - 02 CIT(A) Coimbatore
Income Tax 4.20 2001 - 02 ITAT, Chennai
Income Tax 7.67 2002 - 03 High Court, Chennai
Income Tax 10.91 2003 - 04 ACIT Coimbatore
Income Tax 3.03 2003 - 04 ITAT, Chennai
Income Tax 251.84 2004 - 05 ITAT, Chennai
Income Tax 378.53 2005 - 06 TAT, Chennai
Income Tax 131.35 2006 - 07 CIT(A) Coimbatore
The Andhra
Pradesh 189.64 1999 - 00 to DC(CT) (A) Kurnool
Govt. Sales
Tax Act
2003 - 04
TN General
Sales 83.93 1998 - 99 High Court, Chennai
Central
Excise. TN 19.29 2004 - 05 & CESTAT, Chennai
2005 - 06
Commissioner
of
Central
Excise. TN 43.49 2003 - 04 Appeals, Coimbatore
Service
Tax 0.31 2006 - 07 Comissioner of
Appeals, Tiruppur
10. There are accumulated losses and in the current financial year the
Company has not incurred cash loss. However there were cash losses in
the immediately preceding financial year.
11. 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 to a bank. There are no debenture holders
during the year.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of
securities by way of pledge of shares and debentures.
13. In our opinion, the company is not a chit fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore the provisions of clause (xiii) of
para 4 of the Order are not applicable.
14. According to the information and explanations given to us, the
company is not dealing in or trading in any shares and securities and
hence the provisions of Para (xiv) of the order are not applicable.
15. According to the information and explanations given to us, the
company has not given any guarantees for loans taken by others from
banks or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the term loan(s) have been applied for the purpose for
which they were raised.
17. According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, we report that
no funds raised on short term basis have been used for long term
investments.
18. The company has not made any preferential allotment of shares
during the year and hence the provisions of clause (xviii) of para 4 of
this Order are not applicable.
19. The company has not issued any debentures during the year and hence
the provisions of clause (xix) of para 4 of this Order are not
applicable.
20. The company has not raised any money by way of public issues during
the year and hence the provisions of clause (xx) of para 4 of this
Order are not applicable.
21. During the course of our examination of the books of accounts
carried on in accordance with the generally accepted auditing practices
in India and according to the information and explanations given to us,
we have neither come across any instance of fraud on or by the company,
noticed or reported during the year nor have been informed of such case
by the management.
For Reddy, Goud & Janardhan
Chartered Accountants
Registration No. 003254S
Balakrishna S Bhat
Coimbatore Partner
29th May, 2010 Membership No.202976
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