07 January 2014
The format of the Statutory Audit Report is as under : .
Auditor's Report (Amarjothi Spinning Mills) . Year End : Mar '13
I have audited the accompanying financial statements of Amarjothi Spinning Mills Limited, which comprise the Balance Sheet as at 31st March 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
In my opinion and to the best of my information and according to the explanations given to me, 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:
(i) in the case of the Balance Sheet, of the STATE OF AFFAIRS of the Company as at 31 March 2013;
(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
1. As required by the Companies (Auditor''s Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, I 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, I report that:
a. I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of my audit;
b. In my opinion proper books of account as required by law have been kept by the Company so far as appears from my 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 my opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;
e. On the basis of written representations received from the directors as on 31 March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.
The Annexure referred to in paragraph 1 of my report of even date to the members of Amarjothi Spinning Mills Limited on the accounts of the company for the year ended 31 March 2013.
On the basis of such checks as I considered appropriate and according to the information and explanation given to me during the course of my audit, I report that;
1. a. The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
b. As explained to me, fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.
c. In my opinion and according to the information and explanations give to me, no fixed asset has been disposed off during the year that affect the going concern assumption.
2. a. As explained to me, inventories have been physically verified during the year by the management at reasonable intervals.
b. In my opinion and according to the information and explanations given to me, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.
c. In my opinion and on the basis of my examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.
3. a. The company has taken unsecured loan from parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.48.24 Crores and the year-end balance of loans taken from such parties was Rs.48.24 crores. These amounts have been brought in pursuant to the terms of sanction given by the bankers.
b. In my opinion the rate of interest and other terms and conditions on which loans have been taken from parties listed in the registers maintained under section 301 are not, prima facie, prejudicial to the interest of the company.
c. The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.
d. There is no overdue amount of loans taken from parties listed in the registers maintained under section 301 of the Companies Act, 1956.
e. According to the information and explanations given to me and on the basis of my examination of the books of account, the Company has taken unsecured loans from 4 parties listed in the register maintained under Section 301 of the Companies'' Act 1956.
f. The Company has not granted any loan, secured or unsecured to companies, firms and other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and hence the other subsections are not applicable.
4. In my opinion and according to the information and explanations given to me, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of my audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.
5. a. Based on the audit procedures applied by me and according to the information and explanations provided by the management, 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.
b. As per information & explanations given to me and in my opinion, the transaction entered into by the company with parties covered u/s.301 of the Act does not exceeds five lakhs rupees in a financial year other than unsecured loans mentioned in item no.3 of this report and a sum of Rs.58.40 lakhs paid towards purchase of lands. Such transactions are made at prevailing market prices and are comparable.
6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act 1956.
7. As per information & explanations given by management, the company has an internal audit system commensurate with the size and nature of its business.
8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section(1) of section 209 of the Act and I am of the opinion that prima facie the prescribed accounts and records have been made and maintained.
9. a. According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to me there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.
b. According to the information and explanations given to me, there is no amounts payable in respect of Income-tax, wealth-tax, service tax, sales-tax, customs duty and excise duty which have not been deposited on account of any disputes.
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