Mar 31, 2018
Report on the Ind AS financial statements
We have audited the accompanying Ind AS financial statements of KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) (the Company) which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other comprehensive income), the Statement of changes in Equity and the Statement of Cash Flows for the year then ended and a summary of 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 (''the Actâ) with respect to the preparation and presentation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting of frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are 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.
Auditorsâ 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 Rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 judgement, 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 board of 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 a 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 March 31, 2018, its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (''the Orderâ), 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, a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 appears from our examination of those books;
c) The Balance Sheet, Statement of Profit and Loss including other comprehensive income, the Statement of changes in equity and the Statement of Cash Flow 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.
e) On the basis of written representations received from the directors as on March 31, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of subsection (2) of section 164 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 Annexure-B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the basis of our information and according to the explanations given to us:
i) The company does not have any pending litigations which would impact its financial position.
ii) The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
iii) There were no amounts which were required to be transferred to the Investor Education Protection Fund by the company.
ANNEXURE-A TO THE INDEPENDENT AUDITORSâ REPORT
The Annexure referred to in paragraph 1 under âReport on other legal and regulatory requirementsâ section of our report to the members of KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) for the year ended March 31, 2018.
We report that :
1. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b) According to the information and explanations furnished to us, the Company has not physically verified its fixed assets during the year. However, the Company has adopted a phased programme of verification which, in our opinion, 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 immovable properties are held in the name of the company.
2. In respect of its inventories:
a) According to the information and explanations furnished to us, the Company has physically verified its inventories during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable.
3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Consequently, clauses (iii)(a),(b) and (c) of paragraph 3 of the Order are not applicable.
4. The company has not advanced any loans or made any investments or provided any guarantees during the year. Hence the reporting requirements in terms of clause (iv) of paragraph 3 of the Order regarding reporting on compliance with the provisions of section 185 and 186 of the Act with respect to the loans, investments and guarantees does not arise.
5. The company has borrowed interest free loans from directors and their relatives in pursuance of the stipulation imposed by Andhra Bank at the time of lending and the amount outstanding against such borrowings on 31st March, 2018 was Rs.320.55 lakhs. Apart from the said amounts, the company has not accepted any deposits from the public or members. Hence the question of compliance with the directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under does not apply. According to the information furnished to us, no order has been passed on the Company by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal for non-compliance with the provisions of sections 73 to 76 of the Act.
6. We have broadly reviewed the books of account and records 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 Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed audit of the same.
7. a) According to the information furnished to us, the Company is regular in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income-tax, Value added tax, Service tax, Customs duty, Excise duty, Cess, GST and any other statutory dues applicable to it. There were no undisputed statutory dues in arrears as at the date of the Balance Sheet under report, for a period of more than six months from the date they became payable.
b) According to the information furnished to us and records of the company examined by us, there were no amounts of Income tax, Value added tax, Customs duty, Excise duty, GST and Service tax etc., have been disputed by the Company, and hence were not remitted to the authorities concerned at the date of the Balance Sheet under report.
8. In our opinion and according to the information and explanations furnished to us by the Company, there were no defaults in repayment of dues to banks or government. However, the company has not borrowed any loans from financial institutions, or raised any funds by way of issue of debentures.
9. The company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. In respect of term loans borrowed during the year from banks, the proceeds were applied for the purpose for which the said loans were raised.
10. According to the information and explanations given to us, no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the year.
11. According to the information and explanation given to us and based on examination of the records of the company, the company has provided remuneration for managerial personnel in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V of the Act.
12. The company is not a nidhi company. Accordingly reporting under provisions of para 3(xii) of the Order is not applicable.
13. According to the information and explanations given to us and based on examination of records of the company, transactions with the related parties are in compliance with the provisions of section 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.
14. According to the information and explanations given 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 of the company.
15. 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 them. Accordingly paragraph 3(xv) of the Order is not applicable.
16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure âBâ to the Independent Auditorsâ Report
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited ("the Company") 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.
Management''s Responsibility for Internal Financial Controls
The Board of directors of the company 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by ICAI and the Standards on Auditing prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements 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 Ind AS 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 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
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 31 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.
For Chevuturi Associates
Chartered Accountants
Firm Registration No.000632S
(Raghunadha Rao Balineni)
Partner
(Membership No: 028105)
Place: Camp: Guntur
Date : 28.05.2018
Mar 31, 2016
To the Members of
KALLAM SPINNING MILLS LIMITED
Report on the financial statements
We have audited the accompanying financial statements of KALLAM SPINNING MILLS LIMITED (âthe Companyâ) which comprise the Balance Sheet as at March 31, 2016, 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.
Managementâs responsibility for the 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 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 Accounting standards specified under section 133of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for prevention and detection of frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are 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.
Auditorsâ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under. We conducted our audit in accordance with the standards on auditing specified under section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an 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 Companyâs board of directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2016;
b) In the case of Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and
c) In the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
Report on other legal and regulatory requirements
1. 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 Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 appears from our examination of those books and proper returns adequate for the purposes of the audit have been received from the branches to the extent not visited by us;
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 specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of written representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of sub-section (2) of section 164 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 Annexure-B and
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the basis of our information and according to the explanations given to us:
i. The company does not have any pending litigations which would impact its financial position except those which are disclosed in the notes to the financial statements and para no.-- in Annexure to our Audit report.
ii. The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education Protection Fund by the company.
The Annexure referred to in our report to the members of KALLAM SPINNING MILLS LIMITED (âCompanyâ) for the year ended March 31, 2016.
We report that:
1. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b) According to the information and explanations furnished to us, the Company has not physically verified its fixed assets during the year. However, the Company has adopted a phased programme of verification which, in our opinion, 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 immovable properties are held in the name of the company.
2. In respect of its inventories:
a) According to the information and explanations furnished to us, the Company has physically verified its inventories during the year and no discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable.
3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Consequently, clauses (iii)(a),(b) and (c) of paragraph 3 of the Order are not applicable.
4. The company has not advanced any loans or made any investments or provided any guarantees during the year. Hence the reporting requirements in terms of clause (iv) of paragraph 3 of the Order regarding reporting on compliance with the provisions of section 185 and 186 of the Act with respect to the loans, investments and guarantees does not arise.
5. The company has borrowed interest free loans from directors and their relatives in pursuance of the stipulation imposed by Andhra Bank at the time of lending and the amount outstanding against such borrowings on 31st March, 2016 was Rs. 166 lakhs. Apart from the said amounts, the company has not accepted any deposits from the public or members. Hence the question of compliance with the directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under does not apply. According to the information furnished to us, no order has been passed on the Company by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal for non-compliance with the provisions of sections 73 to 76 of the Act.
6. We have broadly reviewed the books of account and records 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 Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed audit of the same.
7. a) According to the information furnished to us, the Company is regular in depositing with appropriate authorities, the undisputed statutory dues including Provident Fund, Employees. State Insurance, Income-tax, Value added tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues applicable to it. There were no undisputed statutory dues in arrears as at the date of the Balance Sheet under report, for a period of more than six months from the date they became payable.
b) According to the information furnished to us and records of the company examined by us, there were no amounts of Income tax, Value added tax, wealth tax, Customs duty, Excise duty and Service tax have been disputed by the Company, and hence were not remitted to the authorities concerned at the date of the Balance Sheet under report except an amount of Rs. 8,68,630/- being demand towards Income-tax for the asst. year 2011-12 which was appealed before Commissioner of Income- tax (Appeals).
8. In our opinion and according to the information and explanations furnished to us by the Company, there were no defaults in repayment of dues to banks or government. However, the company has not borrowed any loans from financial institutions, or raised any funds by way of issue of debentures.
9. The company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. In respect of term loans borrowed from banks, the proceeds were applied for the purpose for which the said loans were raised.
10. According to the information and explanations given to us, no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the year.
11. According to the information and explanation given to us and based on examination of the records of the company, the company has provided remuneration for managerial personnel in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V of the Act.
12. The company is not a nidhi company. Accordingly reporting under provisions of para 3(xii) of the Order is not applicable.
13. According to the information and explanations given to us and based on examination of records of the company, transactions with the related parties are in compliance with the provisions of section 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.
14. According to the information and explanations given 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 of the company.
15. 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 them. Accordingly paragraph 3(xv) of the Order is not applicable.
16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure - B to Independent Auditorsâ Report KALLAM SPINNING MILLS LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of KALLAM SPINNING MILLS LIMITED ("the Company") as of 31st March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining 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.
Auditors'' 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 "Guidance Note") 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 31st 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 Brahmayya&Co
Chartered Accountants
Firm Registration No. 000513S
(Karumanchi Rajaj)
Place : GUNTUR Partner
Date : 28-05-2016 (Membership No: 202309)
Mar 31, 2015
We have audited the accompanying financial statements of KALLAM
SPINNING MILLS Limited ('the Company') which comprise the Balance Sheet
as at March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's board of directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 ('the Act') with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including Accounting standards specified
under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014. This responsibility includes maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the company and for prevention and
detection of frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; design, implementation and maintenance of
adequate internal financial controls, that are 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.
AUDITORS' RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and Rules made there under. We conducted our
audit in accordance with the standards on auditing specified under
section 143(10) of the Act. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors' 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
atrue 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 an 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 board of directors,
as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the 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, 2015;
b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash fows of the
Company 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..
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 appears from our examination of
those books and proper returns adequate for the purposes of the audit
have been received from the branches to the extent not visited by us;
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 specified
under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014;
e. On the basis of written representations received from the directors
as on March 31, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015 from being
appointed as a director in terms of sub-section (2) of section 164 of
the Act;
f. With respect to the other matters to be included in the Auditor's
Report in accordance with the Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the basis of our
information and according to the explanations given to us:
i. The company does not have any pending litigations which would impact
its financial position except those which are disclosed in the notes to
the financial statements and para no.7 in Annexure to our Audit report.
ii. The company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to
the Investor Education Protection Fund by the company.
The Annexure referred to in our report to the members of KALLAM
SPINNING MILLS LIMITED ("Company") for the year ended March 31, 2015.
We report that:
1. In respect of its fixed assets ;
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) According to the information and explanations furnished to us, the
Company has not physically verified its fixed assets during the year.
However, the Company has adopted a phased programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets.
2. In respect of its Inventories ;
a) According to the information and explanations furnished to us, the
Company has physically verified its inventories during the year. In our
opinion, the frequency of verification is reasonable.
b) In our opinion, 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) According to the information furnished to us, the Company is
maintaining proper records of inventory. The discrepancies noticed on
verification between the physical stocks and the book records, which
were not material, have been properly dealt with in the books of
account.
3. The Company has not granted any loans, secured or unsecured to
companies, forms or other parties covered in the register maintained
under section 189 of the Act. Consequently, clauses (iii)(a) and(b) of
paragraph 3 of the Order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and for the sale of goods and
services. Further during the course of our audit, we have not come
across any instances of major weaknesses in internal control that in
our opinion, require correction.
5. The Company has borrowed interest free unsecured loans from the
directors and their relatives in pursuance of the stipulation imposed
by Andhra bank at the time of lending and the amount outstanding as on
31.3.2015 against such loans was Rs.148 lakhs. Apart from the said
amounts, the company has not accepted any deposits from the public or
members. Hence the question of compliance with the directives issued by
Reserve Bank of India and the provisions of sections 73 to 76 or any
other relevant provisions of the Act and the rules framed there under
does not apply. According to the information furnished to us, no order
has been passed on the Company by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal for non-compliance with the provisions of sections 73 to 76 of
the Act.
6. We have broadly reviewed the books of account and records
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 Act and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not carried out a detailed audit of the same.
7. a) According to the information furnished to us, the Company is
regular in depositing with appropriate authorities, the undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Income-tax, Value added tax, Wealth tax, Service tax, Customs duty,
Excise duty, Cess and any other statutory dues applicable to it. There
were no undisputed statutory dues in arrears as at the date of the
Balance Sheet under report, for a period of more than six months from
the date they became payable.
b) According to the information furnished to us and records of the
company examined by us, there were no amounts of Income tax, Value
added tax, wealth tax, Customs duty, Excise duty and Service tax have
been disputed by the Company, and hence were not remitted to the
authorities concerned at the date of the Balance Sheet under report
except an amount of Rs.8,68,630/- being demand towards Income-tax for
the asst. year 2011-12 which was appealed before Commissioner of
Income-tax (Appeals).
c) According to the information furnished to us, the company deposited
the amounts required to be transferred to investor education and
protection fund in accordance with the provisions of section 125 of the
Act.
8. According to the information and explanations furnished to us, the
Company does not have accumulated losses at the end of the financial
year. The Company has not incurred cash losses during the financial
year covered by the audit and in the immediately preceding financial
year.
9. In our opinion and according to the information and explanations
furnished to us by the Company, there were no defaults in repayment of
dues to banks. However, the company has not borrowed any loans from
financial institutions or raised any funds by way of issue of
debentures.
10. 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. Hence the requirements of clause (x)
of paragraph 3 of the Order are not applicable to the Company.
11. According to the information and explanations given to us, the
term loans obtained by the Company during the year have been applied
for the purpose for which they were obtained.
12. During the course of our examination of the books and records of
the Company, carried out in accordance with the Generally Accepted
Auditing Practices in India, and according to the information and
explanations given to us, we have not come across any instance of fraud
on or by the Company, noticed or reported during the year, nor have we
been informed of such case by the management.
For BRAHMAYYA & CO.,
Chartered Accountants,
Firm Reg.No-000513S
KARUMANCHI RAJAJ
Place : Guntur Partner
Date : 30-05-2015. Membership No: 202309
Mar 31, 2014
We have audited the accompanying financial statements of KALLAM
SPINNING MILLS Limited ("the Company") which comprise the Balance Sheet
as at March 31, 2014, the Statement of Profit and Loss and the 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 13.9.2013 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.
Auditors'' responsibility
Our responsibility is to express an opinion on the 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 auditors'' 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 auditors
consider internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and 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 of
the Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date
Report on other legal and regulatory requirements
As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended, 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.
As required by section 227(3) of the Act, we report that :
1. 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;
2. 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;
3. 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;
4. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Act read with the General
Circular 15/2013 dated 13.9.2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013;
5. 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 is 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 Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
The Annexure referred to in our report to the members of KALLAM
SPINNING MILLS LIMITED ("the Company") for the year ended March 31,
2014, we report that:
1. In respect of its fixed assets ;
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) According to the information and explanations furnished to us, the
Company has not physically verified its fixed assets during the year.
However, the Company has adopted a phased programme of verification of
its fixed assets which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets.
c) According to the information and explanations furnished to us, the
Company has not disposed off a substantial part of its fixed assets
during the year and therefore do not affect the going concern
assumption.
2. In respect of its Inventories ;
a) According to the information and explanations furnished to us, the
Company has physically verified its inventories during the year. In our
opinion, the frequency of such verification to the extent carried out
is reasonable.
b) In our opinion, 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) According to the information furnished to us, the Company is
maintaining proper records of inventory. The discrepancies noticed on
verification between the physical stocks and the book records, which
were not material, have been properly dealt with in the books of
account.
3. In respect of its loans
a) The Company has not granted any loans secured or unsecured, to/from
companies, firms or other parties covered in the register maintained
under section 301 of the Act at the beginning of the year or during the
year. Consequently, reporting under clauses (iii)(b), (iii)(c) and
(iii)(d) of paragraph 4 of the Order are not applicable.
b) The Company has taken loans aggregating at the date of balance sheet
to Rs.128.35 lakhs from 3 directors and Rs.31.99 lakhs from 10 parties
covered in the register maintained under section 301 of the Act.
c) According to the information and explanations furnished to us, the
above loans obtained are interest free. The other terms and conditions
on which these loans have been taken by the Company from parties
covered in the register maintained under section 301 of the Act are
not, prima facie, prejudicial to the interest of the Company.
d) The company has accepted the above loans as per the agreements with
banks who sanctioned term loans to the company and the terms of
repayment of said deposits are based on the tenure of term loans.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory, fixed assets and for the sale of goods and
services. Further during the course of our audit, we have not come
across any instances of major weaknesses in internal control system.
5. In respect of the contracts or arrangements referred to in section
301 of the Act:
a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
section 301 of the Act have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of
contracts/arrangements entered in the register maintained under section
301 of the Act and exceeding the value of Rs.5 lakhs in respect of each
party during the year have been made at prices which appear reasonable
as per information available with the Company and other terms of
business with such parties, at the relevant time.
6. The Company has complied with the provisions of sections 58A and
58AA or any other relevant provisions of the Act and Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. According to the information furnished to us,
no order has been passed on the Company by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal for noncompliance with the provisions of sections
58A and 58AA of the Act.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account and records
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 Act and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not carried out a detailed audit of the same.
9. a) According to the information furnished to us, the Company is
regular in depositing with appropriate authorities, the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income tax, Sales tax,
Wealth tax, Service tax, Customs duty, Excise duty, Cess and any other
statutory dues applicable to it. There were no undisputed statutory
dues in arrears as at the date of the Balance Sheet under report, for a
period of more than six months from the date they became payable.
b) According to the information furnished to us and records of the
Company examined by us, at the date of Balance Sheet, there were no
amounts of Income-tax, Wealth-tax, Sales tax, Customs duty, Service tax
and Excise duty have been disputed by the Company, and hence were not
remitted to the authorities concerned authorities.
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
furnished to us and based on records of the company, there were no
defaults in repayment of dues to banks except delay by 38 days in
respect of instalment of Rs.90 lakhs due to Andhra bank. Further an
amount of Rs.4.82 lakhs being liability towards interest to Andhra Bank
is pending for payment since April, 2013. The company has not borrowed
any amounts from financial institutions or by way of issue of
debentures.
12. According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
furnished to us, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society and hence the requirements of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company during the
year under report.
14. According to the information furnished to us, the Company is not
dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the requirements of clause (xiv) of paragraph
4 of the Order are not applicable to the Company.
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. Hence the requirements of clause (xv)
of paragraph 4 of the Order are not applicable to the company.
16. According to the information and explanations given to us, the term
loans obtained by the Company during the year have been applied for the
purpose for which they were obtained.
17. According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that considering the internal accruals of the Company during
the year under report that funds raised on short-term basis have not
been used for long-term investment or other investments during the
year.
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
year to parties and companies covered in the register maintained under
Section 301 of the Act.
19. According to the information and explanations given to us, the
Company has not issued any debentures. Hence the clause (xix) of
paragraph 4 of the Order is not applicable.
20. The Company has not raised any money through public issues during
the year. Accordingly, the provisions of clause (xx) of paragraph 4 of
the Order are not applicable to the Company during the year under
report.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the Generally Accepted
Auditing Practices in India, and according to the information and
explanations given to us, we have not come across any instance of fraud
on or by the company, noticed or reported during the year, nor have we
been informed of such case by the management.
For BRAHMAYYA & CO.,
Chartered Accountants,
Firm Reg.No-000513S
Place : Guntur
Date : 27.05.2014
P.LAKSHMANA RAO
Partner
ICAI M.No.13254
Mar 31, 2013
Report on the financial statements
We have audited the accompanying financial statements of KALLAM
SPINNING MILLS LIMITED ("the Company") which comprise the Balance Sheet
as at March 31,2013, the Statement of Profit and Loss and the Cash Flow
Statement for the year 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"). 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 re free from material misstatement,
whether due to fraud or error.
Auditors'' responsibility
Our responsibility is to express an opinion on the 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 auditors'' 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 auditors
consider 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
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 of
the Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date
Report on other legal and regulatory requirements
As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended, 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.
As required by section 227(3) of the Act, we report that:
1. 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;
2. 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;
3. 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;
4. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Act;
5. 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 is 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 Act; and
6. 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 Act,
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 TO THE INDEPENDENT AUDITORS'' REPORT
The Annexyre referred to in our report to the members of KALLAM
SPINNING MILLS LIMITED ("the Company") for the year ended March
31,2013, we report that:
1. In respect of its fixed assets;
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) According to the information and explanations furnished to us, the
Company has not physically verified its fixed assets during the year.
However, the Company has adopted a phased programme of verification of
its fixed assets which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets.
c) According to the information and explanations furnished to us, the
Company has not disposed off a substantial part of its fixed assets
during the year and therefore do not affect the going concern
assumption.
2. In respect of its Inventories;
a) According to the information and explanations furnished to us, the
Company has physically verified its inventories during the year. In our
opinion, the frequency of such verification to the extent carried out
is reasonable.
b) In our opinion, 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) According to the information furnished to us, the Company is
maintaining proper records of inventory. The discrepancies noticed on
verification between the physical stocks and the book records, which
were not material, have been properly dealt with in the books of
account.
3. In respect of its loans
a) The Company has not granted any loans secured or unsecured, to/from
companies, firms or other parties covered in the register maintained
under section 301 of the Act at the beginning of the year or during the
year. Consequently, reporting under clauses (iii)(b), (iii)(c)and
(iii)(d) of paragraph 4 of the Order are not applicable.
b) The Company has taken fixed deposits aggregating to at the date of
balance sheet to Rs. 106.65 lakhs from 3 directors and Rs.29.79 lakhs
from 7 parties covered in the register maintained under section 301 of
the Act.
c) According to the information and explanations furnished to us, the
above loans obtained are interest free. The other terms and conditions
on which fixed deposits have been taken by the Company from parties
covered in the register maintained under section 301 of the Act are
not, prima facie, prejudicial to the interest of the Company. d) The
company has accepted the above deposits as per the agreements with
banks who sanctioned term loans to the company and as per the terms,
these loans are not repayable during the period of term loans. Hence
the term of repayment of said deposits are based on the tenure of term
loans.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory, fixed assets and for the sale of goods and
services. Further during the course of our audit, we have not come
across any instances of major weaknesses in internal control system.
5. In respect of the contracts or arrangements referred to in section
301 of the Act:
a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
section 301 of the Act have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of
contracts/arrangements entered in the register maintained under section
301 of the Act and exceeding the value of Rs.5 lakhs in respect of each
party during the year have been made at prices which appear reasonable
as per information available with the Company and other terms of
business with such parties, at the relevant time.
6. The-Company has complied with the provisions of sections 58A and
58AA or any other relevant provisions of the Act and Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. According to the information furnished to us,
no order has been passed on the Company by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal for noncompliance with the provisions of sections
58Aand 58AAof the Act.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account and records
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 Act and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not carried out a detailed audit of the same.
9. a) According to the information furnished to us, the Company is
regular in depositing with appropriate authorities, the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income tax, Sales tax,
Wealth tax, Service tax, Customs duty, Excise duty, Cess and any other
statutory dues applicable to it. There were no undisputed statutory
dues in arrears as at the date of the Balance Sheet under report, for a
period of more than six months from the date they became payable except
an amount of Rs.25,44,624/- being instalment in respect of Sales tax
deferment pending for remittance as on date of balance sheet. b)
According to the information furnished to us and records of the Company
examined by us, at the date of Balance Sheet, there were no amounts of
Income-tax, Wealth-tax, Sales tax, Customs duty, Service tax and Excise
duty have been disputed by the Company, and hence were not remitted to
the authorities concerned authorities.
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
furnished to us and based on records of the company, the company made
delays in repayment of dues to banks. However the company has not
borrowed any amounts from financial institutions or by way of issue of
debentures. The following are the details of defaults made by the
company in repayment of term loans from banks.
Instalment Due Date Actual Date period of
Name of the Bank amount of payment of payment delay up
31-03-2013
(Amount in Rs.) (No of
Days)
Andhra Bank (Rs.
893 lakhs) 2250000 31-03-2013 -- 1
Andhra Bank (Rs.
1440 lakhs) 10800000 31-03-2013 -- 1
Andhra Bank (Rs,
1780 lakhs) 9000000 31-03-2013 -- 1
Andhra Bank (Rs.
960 lakhs) 7500000 31-03-2013 -- 1
Andhra Bank (Rs.
480 lakhs) 250000 31-03-2013 -- 1
Indian Bank (Rs.
1980 lakhs) 5692500 31-03-2013 -- 1
Indian Bank (Rs.
995 lakhs) 500000 31-03-2013 -- 1
Indian Bank (Rs.
1350 lakhs) 500000 31-03-2013 -- 1
However all the above installments falls due on 31.3.2013 were repaid
on 23.4.2013.
12. According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
furnished to us, the Company is not a chit fund or a nidhi/mutual
benefit fund/society and hence the requirements of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company during the
year under report.
14. According to the information furnished to us, the Company is not
dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the requirements of clause (xiv) of paragraph
4 of the Order are not applicable to the Company.
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. Hence the requirements of clause (xv)
of paragraph 4 of the Order are not applicable to the company.
16. According to the information and explanations given to us, the
term loans obtained by the Company during the year have been applied
for the purpose for which they were obtained.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that considering the internal accruals of the Company
during the year under report that funds raised on short-term basis have
not been used for long-term investment or other investments during the
year.
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
year to parties and companies covered in the register maintained under
Section 301 of the Act.
19. According to the information and explanations given to us, the
Company has not issued any debentures. Hence the clause (xix) of
paragraph 4 of the Order is not applicable.
20. The Company has not raised any money through public issues during
the year. Accordingly, the provisions of clause (xx) of paragraph 4 of
the Order are not applicable to the Company during the year under
report.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the Generally Accepted
Auditing Practices in India, and according to the information and
explanations given to us, we have not come across any instance of fraud
on or by the company, noticed or reported during the year, nor have we
been informed of such case by the management.
For BRAHMAYYA&CO.,
Chartered Accountants,
Firm Regn. No. 000513S
Place: Guntur (P. LAKSHMANA RAO)
Date: 30-05-2013 Partner
ICAIM.No.13254
Mar 31, 2012
We have audited the attached Balance Sheet of KALLAM SPINNIING MILLS
LIMITED as at 31 March2012, the Statement of Profit and Loss for the
year ended on that date annexed thereto, and its Cash- flow Statement
for the year ended on that date. These financial statements are the
responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on ouraudit.
We conducted our audit in accordance with auditing standards generally
accepted in India, which require that we plan and perform the audit to
obtain reasonable assurance that the financial statements are free from
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes an assessment of 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.
As required by the Companies (Auditors. Repbrt) Order, 2003 issued by
the Government of India in terms of sub-Section (4A) of Section 227 of
the Companies Act, 1956, we enclose in theAnnexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
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 such
books;
c. The Balance Sheet and 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 dealt with by this report comply with the
Accounting Standards referred to in sub-seciion (3C) of Section 211 of
the Companies Act, 1956;
e. On the basis of written representations received from the
Directors, as on March 31,2012, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31,2012 from being appointed as a 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 read together with the
significant accounting policies and notes thereon 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 Profit for
the year ended on that date, and
iii. In the case of the Cash-flow Statement of the cash-flows of the
company for the year ended on that date.
Annexure referred to in paragraph 3 of our report of even date.
1.1 According to the information and explanations furnished to us, the
company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
1.2 According to the information and explanations furnished to us, the
company has physically verified its fixed assets during the year and no
material discrepancies were noticed on such verification.
1.3 According to the information and explanations furnished to us, the
company has not disposed of a substantial part of its fixed assets
during the year as to affect the going concern assumption in preparing
the financial statements under report.
2.1 According to the information and explanations furnished to us, the
company has physically verified its inventories during the year. In our
opinion, the frequency of such verification to the extent carried out
is reasonable.
2.2 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 ofthe company and the nature of its business.
2.3 According to the information furnished to us, the company is
maintaining proper records of its inventory. The discrepancies if any
noticed on verification of inventories between the physical stocks to
the extent verified during the year and the book records were not
material, and have been properly dealt with in the books of account. '
3.1 According to the information and explanations furnished to us, the
company has not granted any loans secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 ofthe Companies Act 1956, at the beginning ofthe year or during the
year, and consequently reporting under sub-clauses b, c and d of clause
4 (iii) of the Order does not arise during the year under report.
3.2 According to the information and explanations furnished to us, the
company has taken loans aggregating at the date of the Balance Sheet to
Rs.68.95 lakhs from 3 directors, Rs.20.14 lakhs from 7parties covered
in the register maintained under Section 301 ofthe Companies Act 1956.
3.3 According to the information and explanations furnished to us, the
above loans obtained are interest free. The other terms and conditions
on which loans have been taken by the company from the parties covered
in the register maintained under section 301 ofthe Companies Act, 1956
are not, prima facie, prejudicial to the interest ofthe company.
3.4 According to the information and explanations furnished to us, the
above loans are repayable on demand and hence the question of
regularity in repayment of principal amounts does not arise.
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 purchase of inventory, fixed assets and with
regard to the sale of goods and services. Further, during the course of
our audit, we have not come across any instances of major weaknesses in
internal control system that in our opinion, require correction but
have so continued without correction.
5.1 Based on the information and explanations given to us, we are of
the opinion that the particulars of contracts or arrangements referred
to in Section 301 of Act have been entered in the register required to
be maintained under that section.
5.2 In opinion and according to the information and explanations given
to us, the transactions made in pursuance of such contracts or
arrangements that have been entered in the register maintained under
Section 301 ofthe Companies Act, 1956 have been made at prices which
are reasonable having regard to prevailing market prices and other
terms of business with such parties, at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
58A, 58AA and any other relevant provisions of the Act and Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. According to the information furnished to us,
no Order has been passed on the company by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal for non- compliance with the provisions of Sections
58A, 58AAof the Companies Act 1956.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account and records
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, wherever prescribed, and we are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained. However, we are not required to and have not
carried out a detailed audit of the same.
9.1 According to the information furnished to us, the company has been
regular in depositing with the appropriate authorities, the undisputed
statutory dues including Provident Fund, Investor Education Protection
Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other material
statutory dues applicable to it and there were no out standing amounts
as at the date of the Balance Sheet under report, for a period of more
than six months from the date they became payable.
9.2 According to the information furnished to us, and records of the
company examined by us, at the date of the Balance Sheet, there were no
amounts of Sales Tax, Customs Duty, Excise Duty, Cess, Income Tax,
Wealth Tax and Service Tax that were disputed by the company and hence
were not remitted to the concerned authorities.
10. The company had no accumulated losses at the end of the year under
report and it did not incur cash losses during the said year or in the
immediately preceding financial year.
11. In our opinion and according to the information and explanations
furnished to us by the company, there were no defaults in repayment of
its dues to financial institutions, banks or debenture holders at the
date of the Balance Sheet.
12. According to the information furnished to us, the company has not
granted any loans or advances on the basis of security by way of pledge
of shares, debentures, and other securities.
13. In our opinion and according to the information and explanations
furnished to us, the company is not a chit fund or a nidhi / mutual
benefit fund/ society and hence, the requirements of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to
the company during the year under report.
14. According to the information furnished to us, the company is not
dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the requirements of clause 4(xiv) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
company.
15. According to the information furnished to us, the company has not
given any guarantees for loans taken by others from any banks or
financial institutions during the year and also there are no such
outstanding guarantees as on date of balance sheet.
16. In our opinion and according to the information and explanations
furnished to us, the term loans taken by the company 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 are of
the opinion that considering the internal accruals of the company
during the year under report, funds raised by the company on short term
basis have prima facie not been used for long term investment.
18. According to the information and explanations furnished to us, the
company has not made any preferential allotment of shares during the
year to parties and companies covered in the register maintained under
section 301 oftheCompaniesAct, 1956.
19. According to the information and explanations given to us, the
company has not issued any debentures during the year under report.
20. The company has not raised any moneys through public issue of its
securities during the year, and the question of end use of such moneys
did not arise during the year.
21. During the course of our examination of the accounts of the
company in accordance with generally accepted auditing practices, we
have not come across any instances of fraud on or by the company, nor
have we been informed by the management, of any such instance being
noticed or reported during the year.
For BRAHMAYYA & CO.,
Chartered Accountants
Firm Regn. No. 000513S
Place : Guntur (KARUMANCHIRAJAJI)
Date : 25-05-2012 Partner
ICAI MembershipNo.202309
Mar 31, 2010
We have audited the attached Balance Sheet of KALLAM SPINNI1NG MILLS
LIMITED as at 31 March 2010, its Profit and Loss Account for the year
ended on that date annexed thereto, and its Cash-flow Statement for the
year ended on that date. These financial statements are the
responsibility of the companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India, which require that we plan and perform the audit to
obtain reasonable assurance that the financial statements are free from
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes an assessment of 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.
As required by the Companies (Auditors Report) Order, 2003 issued by
the 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. 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 such
books;
c. The Balance Sheet and 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 March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 from being appointed as a 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 read together with
the significant accounting policies and notes thereon 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 31s1 March, 2010;
ii. in the case of the Profit and Loss Account, of the Profit for
the year ended on that date, and
iii. in the case of the Cash-flow Statement of the cash-flows of the
company for the year ended on that date.
Annexure referred to in paragraph 3 of our report of even date.
1.1 According to the information and explanations furnished to us, the
company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
1.2 According to the information and explanations furnished to us, the
company has physically verified its fixed assets during the year and no
material discrepancies were noticed on such verification.
1.3 According to the information and explanations furnished to us, the
company has not disposed of a substantial part of its fixed assets
during the year as to affect the going concern assumption in preparing
the financial statements under report.
2.1 According to the information and explanations furnished to us, the
company has physically verified its inventories during the year. In our
opinion, the frequency of such verification to the extent carried out
is reasonable.
2.2 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.
2.3 According to the information furnished to us, the company is
maintaining proper records of its inven- tory. The discrepancies if any
noticed on verification of inventories between the physical stocks to
the extent verified during the year and the book records were not
material, and have been properly dealt with in the books of account.
3.1 According to the information and explanations furnished to us, the
company has not granted any loans secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act 1956, at the beginning of the year or during
the year, and consequently reporting under sub-clauses b, c and d of
clause 4(iii) of the Order does not arise during the year under report.
3.2 According to the information and explanations furnished to us, the
company has taken loans aggre- gating at the date of the Balance Sheet
to Rs.30.75 lakhs from 3 directors, Rs.11.09 lakhs from 7 parties
covered in the register maintained under Section 301 of the Companies
Act 1956.
3.3 According to the information and explanations furnished to us, the
above loans obtained are interest free. The other terms and conditions
on which loans have been taken by the company from the parties covered
in the register maintained under section 301 of the Companies Act, 1956
are not, prima facie, prejudicial to the interest of the company.
3.4 According to the information and explanations furnished to us, the
above loans are repayable on demand and hence the question of
regularity in repayment of principal amounts does not arise.
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 busi-
ness with regard to purchase of inventory, fixed assets and with regard
to the sale of goods and services. Further, during the course of our
audit, we have not come across any instances of major weaknesses in
internal control system that in our opinion, require correction but
have so continued without correction.
5.1 Based on the information and explanations given to us, we are of
the opinion that the particulars of contracts or arrangements referred
to in Section 301 of Act have been entered in the register required to
be maintained under that section.
5.2 In opinion and according to the information and explanations given
to us, the transactions made in pursuance of such contracts or
arrangements that have been entered in the register maintained under
Section 301 of the Companies Act, 1956 have been made at prices which
are reasonable having regard to prevailing market prices and other
terms of business with such parties, at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
58A, 58AA and any other relevant provisions of the Act and Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. According to the information furnished to us,
no Order has been passed on the company by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal for non-compliance with the provisions of Sections
58A, 58AA of the Companies Act 1956.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account and records
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, wherever prescribed, and we are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained. However, we are not required to and have not
carried out a detailed audit of the same.
9.1 According to the information furnished to us, the company has been
regular in depositing with the appropriate authorities, the undisputed
statutory dues including Provident Fund, Investor Education Protection
Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Cus- tom Duty, Excise Duty, Cess and other material
statutory dues applicable to it and there were no outstanding amounts
as at the date of the Balance Sheet under report, for a period of more
than six months from the date they became payable.
9.2 According to the information furnished to us, and records of the
company examined by us, at the date of the Balance Sheet, there were no
amounts of Sales Tax, Customs Duty, Excise Duty, Cess, Income Tax,
Wealth Tax and Service Tax that were disputed by the company and hence
were not remitted to the concerned authorities.
10. The company had no accumulated losses at the end of the year under
report and it did not incur cash losses during the said year or in the
immediately preceding financial year.
11. In our opinion and according to the information and explanations
furnished to us by the company, there were no defaults in repayment of
its dues to financial institutions, banks or debenture holders at the
date of the Balance Sheet.
12. According to the information furnished to us, the company has not
granted any loans or advances on the basis of security by way of pledge
of shares, debentures, and other securities.
13. In our opinion and according to the information and explanations
furnished to us, the company is not a chit fund or a nidhi / mutual
benefit fund/ society and hence, the requirements of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
company during the year under report.
14. According to the information furnished to us, the company is not
dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the requirements of clause 4(xiv) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
company.
15. According to the information furnished to us, the company has not
given any guarantees for loans taken by others from any banks or
financial institutions during the year and also there are no such
outstanding guarantees as on date of balance sheet.
16. In our opinion and according to the information and explanations
furnished to us, the term loans taken by the company 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 are of
the opinion that considering the internal accruals of the company
during the year under report, funds raised by the company on short term
basis have prima facie not been used for long term investment.
18. According to the information and explanations furnished to us, the
company has not made any prefer- ential! allotment of shares during the
year to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
19. According to the information and explanations given to us, the
company has not issued any deben- tures during the year under report.
20. The company has not raised any moneys through public issue of its
securities during the year, and the question of end use of such moneys
did not arise during the year.
21. During the course of our examination of the accounts of the
company in accordance with generally accepted auditing practices, we
have not come across any instances of fraud on or by the company, nor
have we been informed by the management, of any such instance being
noticed or reported during the year.
ForBRAHMAYYA&CO,
Chartered Accountants
Firm Regn. No. 000513S
Place : Guntur P. LAKSHMANA RAO
Date ; 29.05.2010 Partner
ICAI Membership No.13254