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Auditor Report of Sambandam Spinning Mills Ltd.
Mar 31, 2025
1. We have audited the accompanying Standalone financial statements of Sambandam Spinning Mills
Limited (âthe Companyâ), which comprise the Standalone Balance Sheet as at 31st March 2025, the
Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone
Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended on
that date and notes to the financial statements, including a summary of material accounting policies and
other explanatory information (hereinafter referred to as the âStandalone financial statementsâ).
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
Standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the
manner so required and give a true and fair view in conformity with the Indian Accounting Standards
prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March 2025, its loss including other comprehensive income, the changes
in equity and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section
143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s
Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the
Standalone financial statements under the provisions of the Act, and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics
issued by the Institute of Chartered Accountants of India. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone financial
statements.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the Standalone financial statements of the current period. These matters were addressed in the
context of our audit of the Standalone financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We have determined the matter described below to be the key audit matter to be communicated in our
report.
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Key Audit Matters |
Auditor''s Response |
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Revenue Recognition |
Principal Audit Procedures |
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(Refer to the accompanying Note 2(c) of Material |
In the view of the significance of the matter, our audit |
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The Company''s revenue is mainly derived from sale Revenue from sale of products is recognized when Revenue is recognized when collectability of the |
a. b. |
We assessed the appropriateness of whether We performed procedures to assess the design |
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we have identified Revenue recognition as a key |
c. |
We have performed testing with the sample of |
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d. |
We have also tested the journal entries |
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e. |
Based on the above procedures, no material |
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Information other than the Standalone Financial Statements and Auditor''s Report thereon
5. The Company''s Board of Directors is responsible for the preparation of the other information. The other
information comprises the Management discussion and analysis, Board''s Report including Annexures to
Board''s Report, Corporate Governance and Shareholder''s Information, but does not include the
Standalone financial statements and our auditor''s report thereon.
6. The other information is expected to be made available to us after the date of this auditor''s report. Our
opinion on the Standalone financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
7. In connection with our audit of the Standalone financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
Standalone financial statements, or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement, if any, of this other information, we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of Management and those Charged with Governance for the Standalone
Financial Statements
8. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of 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 (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 Ind AS. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
Standalone financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
9. In preparing the Standalone financial statements, the Board of Directors is responsible for assessing the
Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Board of Directors either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
10. Those Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
Standalone financial statements.
12. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the Standalone financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
(b) Obtain an understanding of internal controls relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible
for expressing our opinion on whether the Company has adequate internal financial controls system
in place and the operating effectiveness of such controls.
(.c.) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
(d) Conclude on the appropriateness of management''s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company''s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s
report to the related disclosures in the Standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor''s report. However, future events or conditions may cause the Company to cease
to continue as a going concern.
(e) Evaluate the overall presentation, structure and content of the Standalone financial statements,
including the disclosures, and whether the standalone financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
13. We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
14. We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
15. From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the Standalone financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
16. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central
Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the
âAnnexure - Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
17. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as
it appears from our examination of those books.
(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including Other
Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone
Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone financial statements comply with the Indian Accounting
Standards specified under Section 133 of the Act, read with Companies (Indian Accounting
Standard) Rules, 2015 as amended.
(e) On the basis of the written representations received from the directors as on 31st March 2025 taken
on record by the Board of Directors, none of the directors is disqualified as on 31st March 2025
from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company
and the operating effectiveness of such controls, refer to our separate Report in âAnnexure - Bâ.
(g) With respect to the matter to be included in the Auditors'' Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid
by the Company to its directors during the year is in accordance with the provisions of Section 197 of
the Act.
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information
and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its
Standalone financial statements - Note 43 to the Standalone financial statements.
(ii) The Company did not have any long-term contracts including derivative contracts for which
there were any material foreseeable losses as at 31st March 2025.
(iii) There has been no delay in transferring amounts required to be transferred to the Investor
Education and Protection Fund by the Company.
(iv) a) The management has represented that, to the best of its knowledge and belief, no funds
have been advanced or loaned or invested (either from borrowed funds or share premium
or any other sources or kind of funds) by the Company to or in any other persons or
entities, including foreign entities (âIntermediariesâ) with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall whether directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever (âUltimate
Beneficiariesâ) by or on behalf of the Company or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.
b) The management has represented, that, to the best of its knowledge and belief, no funds
have been received by the Company from any persons or entities, including foreign
entities (âFunding Partiesâ), with the understanding, whether recorded in writing or
otherwise, that the Company shall whether directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on
behalf of the Funding Party or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries; and
c) Based on such audit procedures as considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that
the representations under subclause (i) and (ii) of Rule 11 contain any material
misstatement.
(v) The Company has not declared or paid any dividend during the year.
(vi) a) Based on our examination which included test checks, the company and its associate has
used an accounting software for maintaining its books of account which has a feature of
recording audit trail (edit log) facility. The audit trail function has operated throughout the
year for all relevant transactions recorded in the software. During the course of our audit,
we did not come across any instance of audit trail feature being tampered with.
b) Further, the audit trail has been preserved by the Company as per the statutory
requirements for record retention.
For P N Raghavendra Rao & Co
Chartered Accountants
Firm Registration Number : 003328S
Pon Arul Paraneedharan - Partner
Salem Membership Number : 212860
24th May 2025 UDIN : 25212860BMJKPD5689
Mar 31, 2024
1. We have audited the accompanying Standalone financial statements of Sambandam Spinning Mills Limited (âthe Companyâ), which comprise the Standalone Balance Sheet as at 31st March 2024, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended on that date and notes to the financial statements, including a summary of material accounting policies and other explanatory information (hereinafter referred to as the âStandalone financial statementsâ).
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31stMarch 2024, its loss including other comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone financial statements under the provisions of the Act, and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics issued by the Institute of Chartered Accountants of India. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone financial statements.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone financial statements of the current period. These matters were addressed in the context of our audit of the Standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matter described below to be the key audit matter to be communicated in our report.
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Key Audit Matters |
Auditor''s Response |
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Revenue Recognition |
Principal Audit Procedures |
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(Refer to the accompanying Note 37.2(c) of Material |
In the view of the significance of the matter, our audit |
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Accounting Policies and Note 29ofaccompanying |
procedures mainly comprised of test of controls and |
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Notes to the Standalone financial statements) |
substantive procedures including the following: |
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The Company''s revenue is mainly derived from sale |
a. |
We assessed the appropriateness of whether |
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of products viz. yarn and yarn related products. |
the accounting policy for revenue recognition |
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Revenue from sale of products is recognized when the performance obligations are satisfied and the |
was in line with relevant Ind AS - 115 âRevenue from Contracts with Customersâ. |
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control of the products is being transferred to |
b. |
We performed procedures to assess the design |
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debtors as per the terms of contract agreed. |
and implementation of internal controls |
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Revenue is recognized when collectability of the resulting receivable is reasonably assured. |
established by the management and tested the operating effectiveness of relevant controls relating to revenue recognition. |
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we have identified Revenue recognition as a key audit matter as revenue recognition is a key performance indicator of the Company given the inherent area of audit risk |
c. |
We have performed testing with the sample of revenue transaction to ensure whether specific revenue transactions before and after the reporting date have been recognized in the appropriate period by comparing the transactions selected with relevant underlying documents including goods delivery notes, s h i p p i n g d o c u m e n ts , c u s to m e r acknowledgement / proof of acceptance and the other terms of sales. |
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d. |
We have also tested the journal entries affecting revenue recognition on a sample basis to identify any unusual or irregular items and validated subsequent credit notes and sales returns up to the date of this report to ensure the appropriateness and accuracy of the recognition of revenue. |
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e. |
Based on the above procedures, no material exception on the revenue recognition has been observed. |
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Information other than the Standalone Financial Statements and Auditor''s Report thereon
5. The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the Management discussion and analysis, Board''s Report including Annexures to Board''s Report, Corporate Governance and Shareholder''s Information, but does not include the Standalone financial statements and our auditor''s report thereon.
6. The other information is expected to be made available to us after the date of this auditor''s report. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
7. In connection with our audit of the Standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement, if any, of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and those Charged with Governance for the Standalone Financial Statements
8. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of 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 (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 Ind AS. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
9. In preparing the Standalone financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
10. Those Board of Directors is also responsible for overseeing the Company''s financial reporting process. Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone financial statements.
12. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the Standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(b) Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
(.c.) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
(d) Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(e) Evaluate the overall presentation, structure and content of the Standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
13. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
14. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
16. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the âAnnexure - Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
17. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standard) Rules, 2015 as amended.
(e) On the basis of the written representations received from the directors as on 31st March 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2024 from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure - Bâ.
(g) With respect to the matter to be included in the Auditors'' Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone financial statements-Note 44 to the Standalone financial statements.
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31st March 2024.
(iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.
(iv) a) The management has represented that, to the best of its knowledge and belief, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (i) and (ii) of Rule 11 contain any material misstatement.
(v) The Company has not declared or paid any dividend during the year.
(vi) a) Proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of
account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the company with effect from April 1,2023.
b) Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility. The audit trail function has operated throughout the year for all relevant transactions recorded in the software.
c) Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.
d) As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable only from April 1,2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31,2024.
For P.N. Raghavendra Rao & Co
Chartered Accountants Firm Registration Number : 003328S
Pon Arul Paraneedharan - Partner
Salem Membership Number : 212860
25th May 2024 UDIN : 24212860BKCXLZ3758
Mar 31, 2018
Report on the standalone Ind AS Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of Sambandam Spinning Mills Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Statement of Standalone Ind AS Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Standalone Ind AS) prescribed 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, 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.
4. We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 Standalone 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 Company''s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.
6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.
Opinion
7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2018, its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
8. We draw attention to note. 45 of the notes forming part of the standalone Ind AS financial statements regarding the Company''s identification of instances of embezzlement of its funds by an employee of the Company. Our opinion is not modified in respect of this matter.
Other Matters
9. The comparative financial information of the Company for the year ended March 31, 2017 and the transition opening balance sheet as at April 1,2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies ( Accounting Standards) Rules,2006 audited by the predecessor auditor whose reports for the year ended March 31, 2017 and March 31,2016 dated May 6,2017 and May 21,2016 respectively expressed an unmodified opinion on those standalone financial statements. The comparative financial information for the year ended March 31, 2017 and the opening balance sheet as at April 1, 2016 has been adjusted for the differences in the accounting principles/ policies adopted by the Company on transition to the Ind AS, which have been audited by us.
Report on Other Legal and Regulatory Requirements
10. As required by Section143 (3) of the Companies Act, 2013, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report is in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
(e) On the basis of the 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 Section 164 (2) of the Companies Act, 2013.
(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 âAâ.
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position vide note 42.
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 and Protection Fund by the Company.
11. As required by the Companies (Auditor''s Report) Order,2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE âAâ TO THE INDEPENDENT AUDITOR''S REPORT
(Referred to in paragraph 11(f) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. We have audited the internal financial controls over financial reporting of Sambandam Spinning Mills Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. 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.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing deemed to be 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.
4. 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.
5. 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
6. 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 (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) 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 (iii) 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
7. 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
8. According to the information and explanations given to us and based on our audit the Company''s internal control system, periodic review of treasury related reports was inadequate in respect of a part of the year.
A âmaterial weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness noted above resulted in a fraud (detailed in note 45) being committed by an employee. Subsequent to unearthing of the fraud, the company has initiated remediation measures before the end of the year towards correcting the material weakness noticed in the internal controls.
In our opinion, except for the effects (detailed in note 45) of the material weakness as described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2018 based on the Guidance note on Audit of Internal Financial Control over financial reporting issued by the Institute of Chartered Accountants of India.
We have considered the material weakness identified and reported as above and the remediation measures initiated by the Company, in determining the nature, timing and extent of audit tests applied in our audit of March 31, 2018 standalone financial statements of the Company, and these material weakness does not affect our opinion on the standalone financial statements of the Company.
âANNEXURE Bâ TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 12 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date on the Standalone Ind AS financial statements of Sambandam Spinning Mills Limited (âthe Companyâ) for the year ended March 31, 2018).
1. In respect of its fixed assets :
(a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets
(b) The fixed assets have been physically verified by the management during the year and no material discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and based on the examination of registered sale deeds/ transfer deeds/ conveyance deeds provided to us, we report that the title deeds, of all the immovable properties are held in the name of the Company.
2. As explained to us the inventories other than goods in transit have been physically verified at the year-end by the management and no material discrepancies were noticed on such physical verification.
3. According to the information and explanations given to us, the Company has granted loan to one Company covered in the register maintained under Section 189 of the Companies Act , 2013 in respect of which:
a. The terms and conditions of the grant of such loan are, in our opinion, prima facie, not prejudicial to the Company''s interest.
b. The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.
c. There is no overdue amount remaining outstanding as at the year end.
4. According to information and explanations given to us the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
5. According to information and explanations given to us, the Company has not accepted any deposits from public however in respect of the deposits accepted from shareholders, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
6. The maintenance of cost records has been specified by the Central Government under Section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under Sub section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
7. According to the information and explanations given to us and the books of account examined by us, in respect of statutory dues:
(a) The company is regular in depositing material amount of undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, Customs duty, Excise duty, value added tax, cess and any other statutory dues as applicable to the appropriate authorities during the year. There were no undisputed amounts payable in respect of the aforesaid statutory dues outstanding as on March 31, 2018 for a period of more than six months from the date they became payable.
(b) There are no dues of Income tax, Sales tax, Service tax, Customs Duty, Excise duty or Value added tax that have not been deposited on account of any dispute. Details of dues of value added tax, and other statutory dues, which have not been deposited as at March 31,2018 on account of any dispute is as stated below:
(Rs. in Lakhs)
|
Nature of dues |
Disputed dues (Net) |
Period to which the amount relates |
Forum where the dispute is pending |
|
Sales tax |
7.17 |
1991-92 |
Coimbatore Court |
|
Corporation Tax |
17.05 |
October 1998 - March 2013 |
Madras High Court |
|
Infrastructure and development |
66.75 |
July 2012 |
Madras High Court |
|
amenities charges |
|||
|
Employee state Insurance |
25.63 |
2003-04 to 2004-05 |
Salem Labour Court |
8. The Company has not defaulted in repayment of dues to any financial institution, or from banks.
9. The Company has not raised any money by way of initial public offer or further public offers (including debt instruments) during the year. Hence reporting on utilization of such money does not arise.
10. To the best of our knowledge and belief, and according to the information and explanations given to us, and considering the size and nature of the Company''s operations no fraud by the company has been noticed or reported during the year. Embezzlement of funds by an employee aggregating Rs.1344.25 lakhs was reported during the year (Refer Note 45).
11. According to the information and explanations given to us, the company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
12. The Company is not a Nidhi Company and accordingly the provisions of Clause (xii) of the Order are not applicable to the Company.
13. In our opinion and according to the information and explanations given to us all transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013, where applicable. The details of the transactions during the year have been disclosed in the Standalone Ind AS financial statements as required by the applicable Accounting Standards. (Refer Note 39).
14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under Clause (xiv) of the Order is not applicable.
15. In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions during the year with directors or persons connected with them. Hence reporting on whether there is compliance with provisions of section 192 of the Companies Act, 2013 does not arise.
16. The Company is not required to be registered under section 45- IA of the Reserve Bank of India Act, 1934.
For R.Sundararajan & Associates
Chartered Accountants
Registration No. 008282S
Date : May 27, 2018 S. Krishnan - Partner
Place : Salem Membership No. 26452
Mar 31, 2017
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Sambandam Spinning Mills Limited (âthe Companyâ) which comprise the Balance Sheet as at March 31, 2017, 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.
Managementâs Responsibility for the Standalone Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs of the Company, profit or loss and cash flow of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order under section 143 (11) of the Act.
4. We conducted our audit of the standalone 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 standalone financial statements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.
8. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect of the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the companyâs internal financial controls over financial reporting.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) The Company has, in accordance with the generally accepted standalone accounting practice, disclosed the impact of pending litigations on its financial position in its financial statements.
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(iv) The Company has provided requisite disclosures in the standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November 2016 to 30th December 2016. Based on our audit procedures and relying on the Management representation we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management- Refer note 3.17 to the standalone financial statements.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
âANNEXURE Bâ TO THE INDEPENDENT AUDITORSâ REPORT
[Referred to in paragraph 9 under the heading âReport on Other Legal & Regulatory Requirementâ section of our report of even date to the standalone financial statements of Sambandam Spinning Mills Limited for the year ended March 31, 2017]
In respect of fixed assets
1. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of the fixed assets.
(b) The fixed assets have been physically verified by the Management in a phased manner, designed to cover all the items over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.
(c) the title deeds of immovable properties of the Company are held in the name of the Company.
2. Inventories have been physically verified during the year by the management at reasonable intervals, and no material discrepancies were noticed on such physical verification.
3. (a) The Company has not granted any loans/guarantees, secured or unsecured, to firms, Limited Liability Partnerships or other parties covered in the Register maintained under section 189 of the Companies Act 2013, and accordingly, the provisions of clause (iii) of paragraph 3 of the Order are not applicable to the Company.
(b) The Company has granted loan to one company covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and based on the information and explanations furnished to us, We report that:
(i) the terms and conditions of grant of such loans are not prejudicial to the Companyâs interest.
(ii) The Schedule of repayment of principal and interest has been stipulated and such repayments are regular.
(iii) there are no amounts overdue
(iv) the provisions of Section 186 of the Companies Act, 2013 have been complied with regard to the above loans.
4. According to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.
5. According to the information and explanations given to us, the Company has not accepted any deposits from public and in respect of the deposits accepted from shareholders, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the Companies (Acceptance of Deposit) Rules, 2014.
6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 of the Companies Act, 2013, and are of the opinion that prima facie, the prescribed account and records have been made and maintained.
7. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, records, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2017 for a period of more than six months from the date on when they became payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Wealth tax and Customs duty which have not been deposited on account of any dispute with the relevant authorities. Details of dues towards excise duty, service tax and sales tax and value added tax that have not been deposited as at March 31, 2017 on account of disputes are stated below: (Nature of dues, dues, period to which the amount relates, forum where dispute is pending) - Excise duty, Rs.84,65,342, Financial year 2001-02 to 2002-03, Customs, Excise and Service tax Appellate Tribunal; Service tax, Rs.8,05,696, Financial year 2004-05 to 2007-08, Customs, Excise and Service tax Appellate Tribunal; Sales tax, Rs.6,52,044, Financial year 1991-92, Deputy Commissioner of Commercial Taxes.
8. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. According to the information and explanations given to us, the company has not borrowed any moneys from a financial institution, government or in the form of debentures.
9. Based upon the audit procedures performed and the information and explanations given by the management, the term loans were applied for the purposes for which the loans were taken. The Company has not raised any money by way of initial public offer or further public offers including debt instruments. Hence reporting on utilization of such money does not arise.
10. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company and no fraud of material significance on the Company by its officerâs or employeeâs has been noticed or reported during the year.
11. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. In our opinion, the Company is not a Nidhi Company and accordingly the provisions of Clause 3 (xii) are not applicable to the Company.
13. In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013. The details of the transactions during the year have been disclosed in the financial statements as required by the Accounting Standards. (Refer note - 3.8 to standalone financial statements).
14. Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.
15. Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non - cash transactions with directors or persons connected with them. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
16. In our opinion, the Company is not required to be registered under section 45- IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Firm registration No.01554S
Salem R. Krishnen - Partner
May 6, 2017 Membership No.201133
Mar 31, 2016
To the Members of Sambandam Spinning Mills Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Sambandam Spinning Mills Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these 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 prescribed under section 133 of the Act, as applicable. 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 judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the order under Section 143 (11) of the Act.
4. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
8. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable.
e. On the basis of written representations received from the directors as on March 31, 2016 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 Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) The Company has, in accordance with the generally accepted accounting practice, disclosed the impact of pending litigations on its financial position in its financial statements.
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses under the applicable law or accounting standards.
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
9 As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143 (11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE âAâ TO THE INDEPENDENT AUDITOR''S REPORT
(Referred to in paragraph 8 (f) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section
3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. We have audited the internal financial controls over financial reporting of Sambandam Spinning Mills Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. 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.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India 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.
4. 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.
5. 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
6. 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
7. 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
8. 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 March 31, 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.
"Annexure Bâ to the Independent Auditors'' Report
Referred to in paragraph 9 under ''Report on Other Legal & Regulatory Requirement'' section of our report of even date to the standalone financial statements of the Company for the year ended March 31, 2016:
In respect of fixed assets:
1. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of the fixed assets.
(b) The fixed assets have been physically verified by the Management in a phased manner, designed to cover all the items over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.
(c) the title deeds of immovable properties of the Company are held in the name of the Company.
2. Inventories have been physically verified during the year by the management at reasonable intervals, and no material discrepancies were noticed on such physical verification.
3. (a) The Company has not granted any loans/guarantees, secured or unsecured, to firms, Limited Liability Partnerships or other parties covered in the Register maintained under section 189 of the Companies Act 2013, and accordingly, the provisions of clause (iii) of paragraph 3 of the Order are not applicable to the Company.
(b) The Company has granted loan to one company covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and based on the information and explanations furnished to us, We report that:
(i) the terms and conditions of grant of such loans are not prejudicial to the Company''s interest.
(ii) The Schedule of repayment of principal and interest has been stipulated and such repayments are regular.
(iii) there are no amounts overdue
(iv) the provisions of Section 186 of the Companies Act, 2013 have been complied with regard to the above loans.
4. According to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.
5. According to the information and explanations given to us, the Company has not accepted any deposits from public and in respect of the deposits accepted from shareholders, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the Companies (Acceptance of Deposit) Rules, 2014.
6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 of the Companies Act, 2013, and are of the opinion that prima facie, the prescribed account and records have been made and maintained.
7. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, records, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they became payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Wealth tax and Customs duty which have not been deposited on account of any dispute with the relevant authorities. Details of dues towards excise duty, service tax and sales tax and value added tax that have not been deposited as at March 31, 2016 on account of disputes are stated below: (Nature of dues, dues, period to which the amount relates, forum where dispute is pending) - Excise duty, Rs.84,65,342, Financial year 2001-02 to 2002-03, Customs, Excise and Service tax Appellate Tribunal; Service tax, Rs.8,05,696, Financial year 2004-05 to 2007-08, Customs, Excise and Service tax Appellate Tribunal; Sales tax, Rs.6,52,044, Financial year 1991-92, Deputy Commissioner of Commercial Taxes.
8. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. According to the information and explanations given to us, the company has not borrowed any moneys from a financial institution, government or in the form of debentures.
9. Based upon the audit procedures performed and the information and explanations given by the management, the term loans were applied for the purposes for which the loans were taken. The Company has not raised any money by way of initial public offer or further public offers including debt instruments. Hence reporting on utilization of such money does not arise.
10. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud of material significance by the Company or any fraud on the Company by its officer''s or employee''s has been noticed or reported during the year.
11. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. The Company is not a Nidhi Company and accordingly the provisions of Clause 3 (xii) are not applicable to the Company.
13. In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013. The details of the transactions during the year have been disclosed in the financial statements as required by the Accounting Standards.
14. Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the under review. Accordingly, the provisions of clause
3 (xiv) of the Order are not applicable to the Company and hence not commented upon.
15. Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non - cash transactions with directors or persons connected with them. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
16. The Company is not required to be registered under section 45- IA of the Reserve Bank of India Act, 1934.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Firm registration No.01554S
Salem R. Krishnen - Partner
May 21, 2016 Membership No.201133
Mar 31, 2015
We have audited the accompanying financial statements of Sambandam
Spinning Mills Limited ("the Company") which comprise the Balance
Sheet as at March 31, 2015, 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
The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation of these financial statements that give
a true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting
Standards specified under section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring and 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 the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal financial control
relevant to the Company's preparation of the financial statements
that give a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 31,2015, and
its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of Section
143(11) 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 it appears from our examination of those
books;
c. the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d. in our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of written representations received from the directors
as on March 31, 2015 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 Section 164(2) of the Act.
f. With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
(i) The Company has, in accordance with the generally accepted
accounting practice, disclosed the impact of pending litigations on its
financial position in its financial statements.
(ii) The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses under the applicable law or accounting standards.
(iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditors' Report
The Annexure referred to in our report to members of Sambandam Spinning
Mills Limited ("the Company) for the year ended March 31, 2015
1. In respect of its Fixed assets:
(i) the company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(ii) the fixed assets were physically verified during the year by the
Management in accordance with a phased programme of verification,
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals having regard to the size of the
Company, nature and value of its assets. According to the information
and explanation given to us, no material discrepancies were noticed on
such verification.
2. In respect of its inventories:
(i) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(ii) ln our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(iii) ln our opinion and according to the information and explanations
given to us, the Company has generally maintained proper records of its
inventories and no material discrepancies were noticed on such physical
verification.
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 Companies Act 2013, and accordingly, the
provisions of clause (iii) of paragraph 3 of the Order are not
applicable to the Company.
4. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control system
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories and fixed assets and for the
sale of goods and services, and during the course of our audit, we have
not observed any continuing failure to correct major weakness in such
internal control system.
5. According to the information and explanations given to us, the
Company has not accepted any deposits from public and in respect of the
deposits accepted from shareholders, the Company has complied with the
directives issued by the Reserve Bank of India and the provisions of
sections 73 to 76 or any other relevant provisions of the Companies Act
2013 and the Companies (Acceptance of Deposit) Rules, 2014.
6. In our opinion and according to the information and explanations
given to us, the requirement for maintenance of cost records pursuant
to the Companies (Cost Records and Audit) Rules, 2014 specified by the
Central Government of India under Section 148 of the Companies Act,
2013 are not applicable to the Company for the year under audit.
7. According to the information and explanations given to us and the
books of account examined by us, in respect of statutory dues:
i)The Company has generally been regular in depositing undisputed
statutory dues including provident fund, employees' state insurance,
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, value added tax, cess and other material statutory dues
applicable to it with the appropriate authorities during the year.
(ii) There were no undisputed amounts payable in respect of the
aforesaid statutory dues outstanding as at March 31, 2015 for a period
of more than six months from the date they became payable.
(iii) There are no dues of Income tax, Wealth tax and Customs duty
which have not been deposited on account of any dispute with the
relevant authorities. Details of dues towards excise duty, service tax
and sales tax and value added tax that have not been deposited as at
March 31, 2015 on account of disputes are stated below: (Nature of
dues, dues, period to which the amount relates, forum where dispute is
pending) - Excise duty, Rs.84,65,342, Financial year 2001-02 to
2002-03, Customs, Excise and Service tax Appellate Tribunal; Service
tax, Rs.8,05,696, Financial year 2004-05 to 2007-08, Customs, Excise
and Service tax Appellate Tribunal; Sales tax, Rs.6,52,044, Financial
year 1991-92, Deputy Commissioner of Commercial Taxes.
(iv) The amounts required to be transferred to Investor Education and
Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under, have been
transferred to such fund within time.
8. The company does not have accumulated losses at the end of the
financial year and the Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
9. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions, banks and debenture holders.
10. 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.
11. In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
12. To the best of our knowledge and belief, and according to the
information and explanations given to us, and considering the size and
nature of the Company's operations, no fraud of material significance
on the Company or no fraud by the Company has been noticed or reported
during the year.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Firm registration No.01554S
Salem R. Krishnen-Partner
May 28, 2015 Membership No.201133
Mar 31, 2014
We have audited the accompanying financial statements of Sambandam
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 Section 211(3C) of the
Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated September 13, 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 misstatements, whether due to fraud or error.
Auditors'' 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 the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the 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, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash flow statement, of the cash flows for the
year ended on that date.
Report on 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 section 227(4A) 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 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, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) in our opinion, the Balance sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
section 211(3C) of the Companies Act 1956 read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act, 2013;
(e) on the basis of written representation 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 section 274(1)(g) of the Companies
Act, 1956.
Annexure to the Independent Auditors'' Report
The Annexure referred to in our report to members of Sambandam Spinning
Mills Limited ("the Company) for the year ended March 31, 2014
1. (i) the company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(ii) the fixed assets are being physically verified under a phased
programme of verification, which, in our opinion, is reasonable having
regard to the nature and value of its fixed assets. However, no
material discrepancies have been noticed during the year on such
verification.
(iii) the company has not disposed off substantial part of its fixed
assets during the year.
2. (i) inventories have been physically verified by the management
during the year. In our opinion, the frequency of such verification is
reasonable.
(ii) the procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(iii) the company is maintaining proper records of inventory. No
material discrepancies were noticed on verification between the
physical stocks and the book records.
3. the Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
register maintained under section 301 of the Act. Thus paragraphs
4(iii) (b) to (d), (f), (g) are not applicable to the Company.
4. in our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to purchase of inventories and fixed assets and for the sale of goods
and services. We have not observed any major weakness in the internal
control system during the course of our audit.
5. (i) in our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register required to
be maintained under that section.
(ii) in our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (5) (i) above and exceeding Rs. 5 lakhs
with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
6. the company has complied with the directives issued by the Reserve
Bank of India and the provisions of sections 58A and 58AA or any other
relevant provisions of the Act and the Companies (Acceptance of
Deposits) Rules, 1975 with regard to deposits accepted from public.
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 book of accounts maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government of India under section 209(1)(d)
of the Companies Act, 1956 in respect of the products manufactured by
the Company and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records.
9. (i) according to the information and explanations given to us and on
the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of 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 and other material
statutory dues have been regularly deposited during the year by the
Company with the appropriate authorities.
(ii) according to the information and explanations given to us, no
undisputed amounts payable in respect provident fund, investor
education and protection fund, employees'' state insurance, income tax,
sales tax, wealth tax, service tax, customs duty, excise duty and other
material statutory dues were in arrears as at March 31, 2014 for a
period of more than six months from the date they became payable.
(iii) according to the information and explanations given to us, there
are no material dues of Income tax, wealth tax and customs duty which
have not been deposited with the appropriate authorities on account of
any dispute. However, according to the information and explanations
given to us, the following dues of excise duty, service tax and sales
tax, have not been deposited by the Company on account of disputes, for
which stay has been obtained. (Nature of dues, dues, period to which
the amount relates, forum where dispute is pending) - Excise duty,
Rs.84,65,342, Financial year 2001-02 to 2002-03, Customs, Excise and
Service tax Appellate Tribunal; Service tax, Rs.8,05,696, Financial
year 2004-05 to 2007-08, Customs, Excise and Service tax Appellate
Tribunal; Sales tax, Rs.6,52,044, Financial year 1991-92, Deputy
Commissioner of Commercial Taxes.
10. the company does not have any accumulated losses at the end of the
financial year and has not incurred any cash losses in the financial
year and in the immediately preceding financial year.
11. the company has not defaulted in repayment of dues to any financial
institution, bank or debenture holders during the year.
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
during the year.
13. in our opinion and according to the information and explanations
given to us, the company is not a chit fund or a Nidhi/mutual benefit
fund/society.
14. according to the information and explanations given to us, the
company is not dealing or trading in shares, securities, debentures and
other investments.
15. according to the information and explanations given to us, the
company has not given any guarantees for loans taken by others from
banks or financial institutions.
16. according to the information and explanations given to us, the term
loans availed by the company were, prima facie, applied for the purpose
for which they were obtained.
17. in our opinion and according to the information and explanations
given to us, on an overall examination of the financial statements of
the company, funds raised on short-term basis have, prima facie, not
been used for long term investment.
18. the company has not made any preferential allotment of shares
during the year.
19. the company has not issued any debentures during the year.
20. the company has not raised any money by public issues during the
year.
21. according to the information and explanations given to us, no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Firm registration No.01554S
Salem R. Krishnen-Partner
May 30, 2014 Membership No.201133
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Sambandam
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 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 Section 211(3C) of the
Companies Act, 1956 ("the Act") and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatements, whether due to fraud or error.
Auditors'' 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 the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance sheet, of the state of affairs of the
Company as at March 31,2013;
(b) In the case of the Statement of Profit and loss, of the profit 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
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of section
227(4A) 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 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, 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 section 211 (3C) of the Act;
(e) on the basis of written representation 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 section 274(1
(g) of the Act.
Annexure to the Independent Auditors'' Report
Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
our audit, we report that:
1. (i) the company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(ii) the fixed assets are being physically verified under a phased
programme of verification, which, in our opinion, is reasonable having
regard to the nature and value of its fixed assets. However, no
material discrepancies have been noticed during the year on such
verification.
(iii) The company has not disposed off substantial part of its fixed
assets during the year.
2. (i) inventories have been physically verified during the year by
the management at reasonable intervals.
(ii) in our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(iii) in our opinion, the company is generally maintaining proper
records of its inventories and no material discrepancies were noticed
on physical verification.
3. on the basis of our examination of the books of account, the
Company has neither granted nor taken any loans, secured or unsecured,
to/from companies, firms or other parties covered in the register
maintained under section 301 of the Act.
4. In our opinion, there is generally an adequate internal control
system commensurate with the size of the company and the nature of its
business, for the purchase of inventories and fixed assets and for the
sale of goods and services. Further, on the basis of our examination of
the books and records of the company, we have neither come across nor
have been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control system.
5. (i) based on the audit procedures applied by us, the particulars of
contracts or arrangements referred to in Section 301 of the Act that
needed to be entered into the register, maintained underthe said
section have been so entered.
(ii) where each of such transactions is in excess of Rs.5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
6. the company has complied with the directives issued by the Reserve
Bank of India and the provisions of sections 58A and 58AA or any other
relevant provisions of the Act and the Companies (Acceptance of
Deposit) Rules, 1975 with regard to deposits accepted from public.
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 cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government of India under section 209(1)(d)
of the Companies Act, 1956 and are of the opinion that prima facie the
prescribed accounts and cost records have been made and maintained. We
have, however, not made a detailed examination of the cost records with
a view to determine whether they are accurate or complete.
9. (i) the Company is generally regular in depositing 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 other
material statutory dues as applicable with the appropriate authorities
during the year.
(ii) no undisputed amounts payable in respect of statutory dues were
outstanding as at March 31,2013 for a period of more than six months
from the date they became payable.
(iii) there are no dues of Income tax, wealth tax and customs duty
which have not been deposited on account of any dispute. Details of
dues towards excise duty, service tax and sales tax that have not been
deposited on account of any dispute, for which stay has been obtained,
are (Nature of dues, dues, period to which the amount relates, forum
where dispute is pending)- Excise duty, Rs.84,65,342, Financial year
2001-02 to 2002-03, Customs, Excise and Service tax Appellate Tribunal;
Service tax, Rs.8,05,696, Financial year 2004-05 to 2007-08, Customs,
Excise and Service tax Appellate Tribunal; Sales tax, Rs.6,52,044,
Financial year 1991 -92, Deputy Commissioner of Commercial Taxes.
10. the company have an accumulated losses of Rs.4,52,01,633 as at
March 31, 2013 and Rs.13,62,62,625 as at March 31, 2012 and has not
incurred any cash loss during the financial year ended March 31,2013
and has incurred a cash loss of Rs.10,43,45,060 in the immediately
preceding financial year.
11. in our opinion, the company has not defaulted in repayment of dues
to any financial institution, bank or debenture holders during the
year.
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
during the year.
13. the company is not a chit fund or a Nidhi/mutual benefit
fund/society. Accordingly the provisions of clause 4 (xiii) of the CARO
are not applicable to the company.
14. the company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the CARO are not applicable to the company.
15. the company has not given any guarantees for loans taken by others
from banks or financial institutions.
16. the term loans availed by the company were, prima facie, applied
for the purpose for which they were obtained.
17. on an overall examination of the financial statements of the
company, funds raised on short-term basis have, prima facie, not been
used for long term investment.
18. the company has not made any preferential allotment of shares
during the year.
19. the company has not issued any debentures during the year.
20. the company has not raised any money by public issues during the
year.
21. based on the audit procedures performed and considering the size
and nature of the company''s operations, no fraud of material
significance on or by the company has been noticed or reported during
the year.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Registration NO.01554S
Salem Rxrishnen - Partner
May 27, 2013 Membership No.201133
Mar 31, 2012
1. We have audited the attached Balance Sheet of Sambandam Spinning
Mills Limited (the Company) as at March 31, 2012, the Statement of
Profit and loss and the Cash Flow Statement for the year ended on that
date, both annexed thereto, (collectively referred to as the financial
statements), - signed by us under reference to this report. These
financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have conducted our audit In accordance with auditing and
assurance standards generally accepted in India. The said Standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures In the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. We have obtained ail the information and explanations, which, to
the best of our knowledge and belief, were necessary for the purposes
of our audit.
4. In our opinion, proper books of account, as required by law, have
been kept by 1he Company so far as appears from our examination of
those books.
5. The financial statements dealt will by this report are in agreement
with the books of account.
6. In our opinion,, the aforesaid financial statements comply in all
material respects with the applicable Accounting Standards referred to
in section 211 (3C) of the Companies Act, 1956 (the Act).
7. On the basis of written representation 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 prima facie disqualified as on
March 31,2012 from being appointed as a director In terms of section
274(1 )(g) of the Act.
8 In our opinion and to the best of our information and according to
1he explanations given to us, the aforesaid financial statements read'
with the Statement on Significant Accounting Policies and Notes to the
Accounts, give the' information required by the Act, in the manner so
required and also give a true and fair view, in conformity with the
accounting principles generally accepted in India:
8.1 In the case of the Balance sheet, of the state of affairs of the
Company as at March 31, 2012;
8.2 In the ease of the Statement of Profit and loss, of the loss for
the year Wide on that date; and &3 in the case of the Cash flow
statement of the cash flows for the year ended on that date.
9. As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Government of India in terms of section 227(4A) of the
Companies Act, 1956, and on the basis of such checks as considered
appropriate and according to the information-and explanations
furnished, it is reported that:
9.1 The company is maintaining proper records showing full particulars
including quantitative details and situation of fixed assets. These
fixed assets are being physically verified by the management under a
phased programme of verification, which, in our opinion, is reasonable
having regard to the nature and value of its fixed assets. However no
material discrepancies have been noticed on such verification. The
company has not disposed off substantial part of its fixed assets
during the year.
9.2 physical verification of inventory has been conducted at reasonable
intervals by the management.
The procedures of physical verification of inventory followed by the
management are reasonable and adequate In relation to the size of the
company and the nature of its business. The company is maintaining
proper records of its inventories and no material discrepancies were
noticed on such physical verification.
9.3 The company has neither granted nor taken any loans, secured or
unsecured, during the year, to/from companies, firms or other parties
covered In the register maintained under section 301 of the Act.
9.4 There is an adequate internal control system commensurate with the
size of the company and the nature of its business for the purchase of
inventory and fixed assets and for the sale of goods and services.
Further, on the basis of our examination of the books and records of
the company, we have neither come across nor have been informed of any
continuing failure to correct major weaknesses in the aforesaid
Internal control system.
9.5 (i) The particulars of contracts or arrangements that need to be
entered into a register under section 301 of the Act have been entered.
(ii) In our opinion, each of the transactions exceeding the value of Rs
5,00,000 pursuant to the aforesaid contracts/arrangement have been made
at prices which are reasonable having regard to the prevailing market
prices at the relevant time.
9.6 The company has complied with the provisions of sections 58A and
58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposit) Rules, 1975 with regard to deposits accepted
from public.
9.7 The company has an internal audit system commensurate with its size
and nature of its business.
9.8 On the basis of the records produced, we are of the opinion that
prima facie, the cost records as per the Companies (Cost Accounting
Records) Rules,2011 prescribed by the Central Government under section
209(1 )(d) of the Companies Act, 1956 have been maintained by the
company. We have, however, not made a detailed examination of the cost
records with a view to determine whether they are accurate or complete.
9.9 (i) the Company is regular in depositing 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 other material statutory dues,
as applicable, With the appropriate authorities during the year.
(ii) No undisputed amounts payable in respect of income tax, wealth
tax, sales tax, customs duty, excise duty and cess were in arrears, as
at the balance sheet date for a period of more than six months from the
date they became payable.
(iii) There are no dues of Income tax/wealth tax, customs duty which
have not been deposited on account of any dispute. Details of dues
towards excise duty, service tax and sales tax that have not been
deposited on account of any dispute, for which stay has been obtained,
are (Nature of dues, dues, forum where dispute Is pending) - Excise
duty, Rs.84,65,342, Customs, Excise and Service tax Appellate Tribunal;
Service tax, Rs.8,05,696, Customs, Excise and Service tax Appellate
Tribune; Sales tax, Rs.6,52,044, Deputy Commissioner of Commercial
Taxes.
9.10 The company does not haves any accumulated losses as at March
31,2011 and has inquired cash loss of Rs. 10,43,45,060 during the
financial year ended March 31, 2012 and has not incurred any cash
losses in the immediately preceding financial year.
9.11 The company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders during the year.
9.12 The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
during the year.
9.13 The provisions of any special statute applicable to a chit fund,
nidhi, mutual benefit fund/societies are not applicable to the Company.
9.14 The company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the CARO are not applicable to the company.
9.15 The company has not given any guarantees for loans taken by others
from banks or financial institutions.
9.16 The term loans availed by the company during the year, were, prima
facie, applied for the purpose for which they were obtained.
9.17 Based on an overall examination of the financial statements of the
company, funds raised on short-term basis have, prima facie, not been
used for long term investment.
9.18 The company has not made any preferential allotment of shares
during the year to any party,
9.19 The company has not Issued any debentures during the year.
9.20 The company has not raised any money by public issues during the
year.
9.21 Considering the size and nature of the company's operations, no
fraud of material significance on or by the company has been noticed or
reported during the year.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Registration No.0l654S
Salem M.K. Rajan-Partner
May 30, 2012 Membership No.4059
Mar 31, 2011
1. We have audited the attached Balance Sheet of Sambandam Spinning
Mills Limited as at March 31,2011 and the Profit and loss Account and
the Cash flow statement (financial statements) for the year ended on
that date (the year), annexed thereto, signed by us under reference to
this report. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing and
assurance standards generally accepted in India. The said Standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. 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.
4. 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.i
5. The financial statements dealt with by this report are in agreement
with the books of account.
6. In our opinion, the aforesaid financial statements pomply in all
material respects with the applicable Accounting Standards referred to
in section 211(3C) of the Companies Act,1956 (the Act).
7. On the basis of written representation received from the directors
as on March 31, 2011, and taken on record by the Board of Directors, we
report that none of the directors is prima facie disqualified as on
March 31, 2011 from being appointed as a director in terms of section
274(1 )(g) of the Act.
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements read
with the Statement on Significant Accounting Policies and Notes to the
Accounts, give the information required by the Act, in the manner so
required and also give a true and fair view, in conformity with the
accounting principles generally accepted in India:
8.1 in the case of the Balance sheet, of the state of affairs of the
Company as at March 31, 2011;
8.2 in the case of the Profit and loss account, of the profit for the
year ended on that date; and
8.3 in the case of the Cash flow statement, of the cash flows for the
year ended on that date.
9. As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Government of India in terms of section 227(4A) of the
Companies Act, 1956, and on the basis of such checks as we considered
appropriate and according to the information and explanations given to
us, we report that:
9.1 In our opinion, the Company is maintaining proper records showing
full particulars including quantitative details and situation of fixed
assets. These fixed assets are being physically verified by the
management under a phased programme of verification, which in our
opinion, is reasonable having regard to the nature and value of its
fixed assets, and no material discrepancies have been noticed on such
verification. The Company has not disposed off substantial part of its
fixed assets during the year,
9.2 Physical verification of inventory has been conducted at reasonable
intervals by the management. In our opinion, the procedures of
physical verification of inventory followed by the management are
reasonable and adequate in relation to the size of the Company and the
nature of its business. The Company is maintaining proper records of
inventory and no material discrepancies were noticed on such
verification as compared to the book records.
9.3 The Company has neither granted nor taken any loans, secured or
unsecured, during the year to/from parties and companies listed in the
register maintained under section 301 of the Act.
9.4 In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. Further, on the basis of our examination of
the books and records of the company, we have neither come across nor
have been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control system.
9.5 (i) The particulars of contracts or arrangements that need to be
entered into a register under section 301 of the Act have been entered.
(ii) In our opinion, each of the transactions exceeding the value of
Rs.5,00,000 pursuant to the aforesaid contracts/arrangement have been
made at prices which are reasonable having regard to the prevailing
market prices at the relevant time.
9.6 In our opinion, the Company has complied with the provisions of
sections 58A and 58AA or any other relevant provisions of the Act and
the Companies (Acceptance of Deposit) Rules, 1975 with regard to
deposits accepted from public.
9.7 In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
9.8 On the basis of the records produced, we are of the opinion that
prima facie, the cost records and related accounts prescribed by the
Central Government under section 209( 1 )(d) of the Act have been made
and maintained by the Company. However, we are not required to carry
out and have not carried out any detailed examination of such records
and accounts.
9.9 (i) In our opinion, the Company is regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, customs duly, excise duty, cess and other
material statutory dues, as applicable, with the appropriate
authorities.
(ii) There are no dues of Income tax/wealth tax, customs duty which
have not been deposited on account of any dispute. Details of dues
towards excise duty, service tax and sales tax that have not been
deposited on account of any dispute, for which stay has been obtained,
are (Nature of dues, dues, forum where dispute is pending) - Excise
duty, Rs.84,65,342, Customs, Excise and Service tax Appellate Tribunal;
Service tax, Rs.8,05,696, Customs, Excise and Service tax Appellate
Tribunal; Sales tax, Rs.6,52,044, Deputy Commissioner of Commercial
Taxes.
9.10 The Company does not have any accumulated losses as at March 31,
2011 and has not incurred any cash losses in the financial year ended
on that date or in the immediately preceding financial year.
9.11 The Company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders during the year.
9.12 The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
during the year.
9.13 The provisions of any special statute applicable to a chit fund,
nidhi, mutual benefit fund/societies are not applicable to the Company.
9.14 The Company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the CARO are not applicable to the company.
9.15 The Company has not given any guarantees for loans taken by others
from banks or financial institutions.
9.16 In our opinion, the term loans availed by the Company during the
year, were, prima facie, applied for the purpose for which they were
obtained.
9.17 Based on an overall examination of the financial statements of the
Company, funds raised on short-term basis have, prima facie, not been
used for long term investment.
9.18 The Company has not made any preferential allotment of shares
during the year to any party.
9.19 The Company has not issued any debentures during the year.
9.20 The Company has not raised money by public issues during the year.
9.21 Considering the size and nature of the Company's operations, no
fraud of material significance on or by the Company has been noticed or
reported during the year.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Registration No.01554S
M.K. Rajan-Partner
Membership No.4059
Salem
May 23, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Sambandam Spinning
Mills Limited as at March 31, 2010 and the relative Profit and loss
Account and the Cash flow statement for the year ended on that date
(the year), signed by us under reference to this report. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have conducted our audit in accordance with auditing and
assurance standards generally accepted in India. The said Standards
reauire that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. 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.
4. In our opinion, proper books of account, as reauired by law, have
been kept by the Company so far as appears from our examination of
those books.
5. The financial statements dealt with by this report are in agreement
with the books of account.
6. In our opinion, the financial statements comply in ail material
respects with the applicable Accounting Standards referred to in
section 211 (3C) of the Companies Act, 1956 (the Act).
7. Based on the written representation 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 prima facie disqualified as on
March 31, 2010 from being appointed as a director in terms of section
274(1 )(g) of the Act.
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements read
with the Significant accounting policies and Notes to the accounts,
give the information required by the Act in the manner so required and
also give a true and fair view, in conformity with the accounting
principles generally accepted in India:
8.1 in the case of the Balance sheet, of the state of affairs of the
Company as at March 31, 2010;
8.2 in the case of the Profit and loss account, of the profit for the
year; and
8.3 In the case of the Cash flow statement, of the cash flows for the
year.
9. As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
issued by the Government of India in terms of section 227(4A) of the
Companies Act, 1956, and on the basis of such checks as we considered
appropriate and according to the information and explanations given to
us, we report that:
9.1 In our opinion, the Company is maintaining proper records to show
full particulars including quantitative details and situation of fixed
assets. These fixed assets have been physically verified by the
management during the year at reasonable intervals and no material
discrepancies were noticed on such verification. The Company has not
disposed off during the year substantial part of its fixed assets.
9.2 Physical verification of inventory has been conducted at reasonable
intervals by the management. In our opinion, the procedures of
physical verification of inventory followed by the management are
reasonable and adequate in relation to the size of the Company and the
nature of its business. The Company is maintaining proper records of
inventory and no material discrepancies were noticed on such
verification as compared to the book records.
9.3 The Company has neither granted nor taken any loans, secured or
unsecured, during the year to/from parties and Companies listed in the
register maintained under section 301 of the Act.
9.4 In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
Pusiness for the purchase of inventory and fixed assets and for the
sale of goods and services. Further we have neither come across nor
have Peen informed of any continuing failure to correct major
weaknesses in the aforesaid internal control system.
9.5 (i) The particulars of contracts or arrangements that need to Pe
entered into a register under section 307 of the Act have been entered.
(ii) In our opinion, eacn of the transactions exceeding the value of
Rs.5,00,000 pursuant to the aforesaid contracts/arrangement have been
made at prices which are reasonaPle having regard to the orevailing
market prices at the relevant time.
9.6 In our opinion, the Company has complied with the provisions of
sections 58A and 58AA or any other relevant provisions of the Act and
the Companies (Acceptance of Deposit) Rules, 1975 with regard to
deposits accepted from public.
9.7 In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
9.8 On the basis of the records produced, we are of the opinion that
prima facie, the cost records and related accounts prescribed by the
Central Government under section 209(1 )(d) of the Act have been made
and maintained by the Company. However, we are not required to carry
out and have not carried out any detailed examination of such records
and accounts.
9.9 (i) In our opinion, the Company has been regular during the year In
depositing 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 other material statutory dues, as applicable, with the
appropriate authorities.
(ii) There are no dues of Income tax, wealth tax, service tax, customs
duty which have not been deposited on account of any dispute. Details
of dues towards excise duty and sales tax that have not been deposited
on account of any dispute are (Nature of dues, dues, forum where
dispute is pending) -Excise duty, Rs.84,65,343, Customs, Excise and
Service tax Appellate Tribunal; Sales tax, Rs.6,52,044, Deputy
Commissioner of Commercial taxes.
9.10 The Company does not have any accumulated losses at the end of the
year and has not incurred any cash losses in the year or in the
immediately preceding year.
9.11 In our opinion, the Company has not defaulted during the year in
repayment of dues to any financial institution, Pank or dePenture
holders.
9.12 The Company has not granted during the year loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
9.13 The provisions of any special statute applicaPle to a chit fund,
nidhi, mutual benefit fund/societies are not applicable to the Company.
9.14 The Company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly, the orovisbns of clause
4(xiv) of the Order are not applicable to the Company.
9.15 The Company has not given any guarantees for loans taken by others
from banks or financial Institutions.
9.16 In our opinion, the term ioans avaiiod Py the Company during the
year, were, prima facie. applied for the purpose for which they were
oPtained.
9.17 Based on an overall examination of the financial statements of the
Company, we report that no funds raised on short-term basis have been
used for long term investment.
9.18 The Company has not made during the year any preferential
allotment of shares to any party.
9.19 The Company has not issued during the year any dePentures.
9.20 The Company has not raised money during the year Py public issue
of shares or other securities.
9.21 No instances of fraud of material significance perpetrated on or
by the Company Peen noticed or reported during the period covered by
our audit.
For M S Krishnaswami & Rajan
Chartered Accountants
Registration No. 01554S
Salem M.K. Rajan-Partner
May 29, 2010 Membership No.4059
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