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Pasari Spinning Mills
BSE: 521080|ISIN: INE604F01010|SECTOR: Textiles - Spinning - Cotton Blended
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« Mar 13
Auditor's Report (Pasari Spinning Mills) Year End : Mar '14
We have audited the accompanying Financial Statements of M/s PASARI
 SPINNING MILLS LIMITED, (the Company), which comprise the Balance
 Sheet as at March 31, 2014, and the Statement of Profit and Loss and
 Cash Flow Statement for the year then ended, and a Summary of
 Significant Accounting Policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements:
 
 Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flows of the Company in accordance with
 the Accounting Standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956 (the Act) read with general circular
 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
 in respect of Section 133 of the Companies Act, 2013. This
 responsibility includes the design, implementation and maintenance of
 internal control relevant to the preparation and presentation of the
 financial statements that give a true and fair view and are free from
 material misstatement, whether due to fraud or error.
 
 Auditor''s Responsibility:
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the financial statements. The procedures
 selected depend on the auditor''s judgment, including the assessment of
 the risks of material misstatement of the financial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the Company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances, 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 the reasonableness of
 the accounting estimates made by management, as well as evaluating the
 overall presentation of the financial statements.
 
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion:
 
 In our opinion and to the best of our information and according to the
 explanations given to us subject to the following:
 
 a.  Non confirmation of balances in respect of Sundry Debtors,
 Creditors and Loans & Advances.
 
 b.  Non disclosure under provisions of the Micro, Small and Medium
 Enterprises Development Act 2006 in the absence of details received
 from suppliers, vide point no.5 in other disclosures.
 
 c.  Non provision towards sales tax arrears including penalty
 aggregating to Rs.1,80,18,068 of the earlier years, vide point no.2 in
 other disclosures.
 
 d.  Non provision of Employee benefits as per AS-15 issued by the
 Institute of Chartered Accountants of India, non quantifiable vide
 point no.7 in other disclosures.
 
 e.  Non provision for depletion in Market value of Investments in
 shares, securities and mutual funds, vide point no.8 in other
 disclosures.
 
 f.  Non provision towards Back billing demand raised by CESCOM
 aggregating ton Rs.28,43,845/- of the earlier years, vide point no.9 in
 other disclosures.
 
 The said Financial Statements read with notes thereon give the
 information required by the Act in the manner so required and give a
 true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (a) In the case of the Balance Sheet, of the State of Affairs of the
 Company as at March 31, 2014;
 
 (b) In the case of the Statement of Profit and Loss, of the PROFIT for
 the year ended on that date; and
 
 (c) In the case of the Cash Flow Statement, of the Cash Flows for the
 year ended on that date.
 
 Report on other Legal and Regulatory Requirements:
 
 1.  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.
 
 2.  As required by section 227(3) of the Act, We report that:
 
 (a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 (b) In our opinion proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books;
 
 (c) The Balance Sheet, Statement of Profit and Loss and the 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
 the Cash Flow Statement comply with the Accounting Standards referred
 to in subsection (3C) of section 211 of the Companies Act, 1956 read
 with the general circular 15/2013 dated 13th September, 2013 of the
 Ministry of Corporate Affairs in respect of the Section 133 of the
 Companies Act, 2013; and
 
 (e) On the basis of written representations received from the Directors
 as on March 31, 2014, and taken on record by the Board of Directors,
 none of the Directors 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 Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT The Annexure referred to in our report
 to the members of M/s PASARI SPINNING MILLS LIMITED (''the Company'') for
 the year ended 31st March, 2014, we report that:
 
 1.  (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of Fixed
 Assets.
 
 (b) The Fixed Assets of the Company have been physically verified by
 the Management during the year at reasonable intervals and no
 discrepancies between the book records and physical verification were
 noticed on such verification.
 
 (c) The Company has not disposed off /sold a substantial portion of its
 Fixed Assets during the year.
 
 2.  (a) The Inventories have been physically verified by the
 Management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) The procedures of physical verification of inventories followed by
 the Management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. In our
 opinion and according to the information and explanations given to us,
 we have not come across any material discrepancies between the physical
 stocks and inventory records.
 
 3.  (a) The Company has taken unsecured interest free loans from the
 Directors of the Company and the company in which the Directors of the
 company are the Directors of that company and except the same, there
 are no other Loans, secured or unsecured from companies, firms or other
 parties, taken by the Company which are listed in the Register
 maintained under section 301 of the Companies Act, 1956.
 
 (b) The Company has not granted any loans, secured or unsecured to
 companies, firms or other parties listed in the Register maintained
 under section 301 of the Act, 1956.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate Internal Control System commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventories and fixed assets and payment for expenses
 and for sale of goods. During the course of our audit, we have not
 observed any continuing failure to correct major weakness in internal
 controls.
 
 5.  In respect of particulars of contracts or arrangements and
 transactions entered in the register maintained in pursuance of section
 301 of the Companies Act 1956;
 
 (a) To the best of our knowledge and belief and according to the
 information and explanations given to us, particulars of contracts or
 arrangements that needed to be entered into the register have been so
 entered.
 
 (b) According to the information and explanations given to us, each of
 the transactions in pursuance of such contracts/ arrangements in excess
 of Rs 5 Lakhs in respect of any party during the year, have been made
 at prices which are reasonable having regard to the prevailing market
 prices at the relevant time, where such prices are available.
 
 6.  In our Opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits within the
 meaning of provisions of Section 58A, 58AA or any other relevant
 provisions of the Companies Act, 1956 and as per The Companies
 (Acceptance of Deposits) Rules, 1975.
 
 7.  In our opinion, the Company has an in house Internal Audit System,
 commensurate with the size and nature of its business.
 
 8.  The Maintenance of Cost records as prescribed by the Central
 Government under section 209 (1) (d) of the Companies Act, 1956 in
 respect of the activities of the Company does apply to the Company, as
 per the directions of the Central Government. However the company has
 stopped its operation from June 2010 and all the workers are given one
 time settlement. The above records are verified and have been
 maintained as per act.
 
 9.  (a) The Company is generally not regular in depositing the
 undisputed Statutory Dues with Appropriate Authorities and there are
 undisputed and outstanding amounts payable in respect of ESI Fund,
 Investor Education and Protection Fund, Income-tax, Service Tax , Sales
 Tax, Cess or any other applicable taxes, Duties or Levies applicable to
 the Company and its business which have remained outstanding as at 31st
 March 2014, for a period of more than six months from the date they
 became payable.
 
 Name of the Statute    Nature of the dues     Amount due     Year
 
 ESIC                    ESIC                  7,0,3115      2010-11
 
 Income tax act          TDS                     36,654    Various years
 
 Karnataka Tax 
 on profession,          Professional Tax        64,000    08-09 to 11-12
 trade, calling 
 and Employment Act
 
 Karnataka Sales 
 tax Act                 Cess on sales           84,760    06-07 to 07-08
 
 (b) There are disputed liabilities with regard to Sales Tax, as on
 31.03.2014
 
 Name of the Statute     Nature of 
                         the Dues          Amount (Rs.)    For the Year
 
 Central Sales Tax Act  Central Sales Tax   4,45,496         1999-00
 
                                            5,80,226         2000-01
 
                                            8,83,692         2001-02
 
 Karnataka Entry 
 Tax Act                Karnataka Sales Tax   46,593         1999-00
 
                                              98,290         2000-01
 
 Karnataka Sales 
 Tax Act                Karnataka Sales Tax 4,35,196         1999-00
 
                                           46,57,137         2000-01
 
                                           321,0,915         2001-02
 
 Penalty                                       5,000         1999-00
 
                                            2,50,000         2000-01
 
                                           18,35,296         2001-02
 
 Interest @ 1/2%                            3,11,968         1999-00
 
                                           33,37,878         2000-01
 
                                           19,18,381         2001-02
 
 Total                                    18,016,068
 
 10. The Company has accumulated losses as at the yearend which is more
 than 50% of its Net worth and has not incurred cash losses during the
 financial year covered by our audit.
 
 11.  In our opinion and according to the information and explanation
 given to us, the Company has not defaulted in repayment of principal
 dues in respect of loans borrowed from Bank as on 31.03.2014. There are
 no debenture holders with the Company.
 
 12. The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13. In our opinion, the Company is not a Chit Fund or a Nidhi Mutual
 Benefit Fund/ society. Therefore, the provisions of clause 4(xiii) of
 the order are not applicable to the Company.
 
 14. The Company is dealing or trading in Shares, Securities, Debentures
 and other Investments in our opinion the company has maintained proper
 records.
 
 15.  In our opinion, the Company has not given any Guarantee for Loans
 taken by others from banks or financial institutions for the purpose
 mentioned.
 
 16. In our opinion, the Company has applied the Term Loans for the
 purpose for which they were obtained. However, during the year the
 Company has not obtained any Term Loan.
 
 17. According to the information and explanations given to us and on an
 overall examination of the financial statements of the Company, we
 report that the funds raised on short term basis have not been used for
 Long Term Investments/purposes.
 
 18. According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares to Parties
 and Companies covered in the register to be maintained under section
 301 of the Act.
 
 19. The Company has no Debentures and hence reporting does not arise in
 respect of creation of securities thereof.
 
 20. The Company has not raised any monies by way of public issues
 during the year.
 
 21. According to the information and explanations given to us, no fraud
 on or by the Company has been noticed or reported during the course of
 our audit.
 
                                               For MURALI & VENKAT
                                             Chartered Accountants
 
                                Firm''s Registration Number: 02162S
 
                                                        JAYANTH A.
 
 Place: Bangalore                                          Partner
 
 Date: 31st July 2014                    Membership Number: 231549
Source : Dion Global Solutions Limited
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