Report on the Standalone Financial Statements:-
I have audited the accompanying standalone financial results of Amarjothi Spinning Mills Limited, which comprise the Balance sheet as at 31st March 2018, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management’s Responsibility for the Standalone Financial Statements:
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies’ Act 2013 (The Act)with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133of the Act, read with Rule 7 of the Companies (Accounts) Rule 2014. 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 frauds and other irregularities; selection and application of appropriate accounting policies, making judgements and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
My responsibility is to express an opinion on these Standalone financial statements based on my audit.
I have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
I conducted my audit in accordance with the Standards on Auditing specified u/s 143(10) of the Act. These standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by Company’s Directors as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my Audit Opinion on the Standalone financial statements.
In my opinion and to the best of my information and according to the explanations given to me, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2018, and its PROFIT and its CASH FLOWS for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:-
As required by the Companies (Auditor’s Report) Order, 2016 (‘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, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143 (3) of the Act, I report that:
1. I have sought and obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of my audit.
2. In my opinion, proper books of accounts as required by law have been kept by the company so far as it appears from my examination of those books.
3. NOT APPLICABLE.
4. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
5. In my opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified u/s 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014.
6. On the basis of the written representations received from the directors as on 31st March 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018 from being appointed as a director in terms of section 164(2) of the Act.
7. 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 my separate Report in Annexure - B.
8. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in my opinion and to the best of my information and according to the explanations given to me;
1. The Company does not have any pending litigations which would impact its financial position.
2. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
3. There has been no delay in transferring amounts, required to be transferred to the Investor Education and protection Fund by the Company.
ANNEXURE - A TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF AMARJOTHI SPINNING MILLS LIMITED.
(Referred to in paragraph (1) under ‘Report on other legal and regulatory requirements’ of my report of even date)
In terms of the information and explanations sought by me and given by the company and the books and records examined by me in the normal course of audit and to the best of my knowledge and belief, I report the following:-
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
2) The fixed assets have been physically verified by the management during the year, which in my opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.
3) The title deeds of all the immovable properties of the company shown under the Fixed Assets schedule are held in the name of the company.
2. The inventories have been physically verified by the management at reasonable intervals during the year. In my opinion, the frequency of such verification is reasonable and no material discrepancies were noticed at the time of verification.
3. The Company has not granted loans, secured or unsecured, to Companies, Firms, LLPs or other parties covered in the register maintained under section 189 of the Act.
4. In respect of loans, investments and guarantees, the provisions of Sections 185 and 186 of the Act have been complied with.
5. The Company has not accepted any deposits to which the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under and the Directions issued by the RBI are applicable. Hence paragraph 3 (5) of CARO is not applicable to the company.
6. I have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 of the Act and I am of the opinion that prima facie the prescribed accounts and records have been made and maintained. I have not however made a detailed examination of the cost records with a view to determining whether they are accurate or complete.
7. (a) Undisputed statutory dues including PF, or ESI, Income Tax, sales tax, service tax, Excise duty, customs duty, VAT cess etc have been regularly deposited by the Company with the appropriate authorities in all cases during the year.
(2) There are no dues of income tax, sales tax, customs duty, excise duty, service tax, VAT or cess etc, which have not been deposited on account of any dispute. A sum of Rs.2642080 has not been paid being Generation tax payable on electricity charges. The matter is under dispute and pending with the honourable high court of Madras. No provision has been made for this in the books.
8. The Company has not defaulted in repayment of loans taken from Financial Institution, Banks, Government or dues to Debenture holders.
9. The Company has not raised any money by way of Initial Public offer/Further Public offer during the year. In my opinion, the moneys raised by way of Term Loans during the year have been applied for the purposes for which those are raised.
ANNEXURE - B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF AMARJOTHI 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”).
I have audited the internal financial controls over financial reporting of Amarjothi Spinning Mills Limited (“the Company”) as of 31st March 2018 in conjunction with my audit of the standalone 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. 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.
My responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on my audit. I conducted my audit in accordance with the Guidance Note on Internal Financial Controls Over Financial Reporting (“the Guidance Note”) and the Standards on Auditing issued by the 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 issued by the Institute of Chartered Accountants of India. Those standards and the Guidance Note require that I 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.
My audit involves performing procedures to obtain evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. My audit of internal financial controls over financial reporting, included obtaining an understanding of internal controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my 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 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.
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 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.
In my 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 March 31, 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”.
Place : Coimbatore P.S.SITARAM, B.Sc., F.C.A.
Date : 30.05.2018 Chartered Accountant.
Membership No: 023033.