| To the Members of AANANDA LAKSHMI SPINNING MILLS LIMITED, SECUNDERABAD.
Report on the Financial Statements:
We have audited the accompanying financial statements of AANANDA
LAKSHMI SPINNING MILLS LIMITED, SECUNDERABAD ("the Company"), which
comprise the Balance Sheet as at March 31,2014, and the Statement of
Profit and Loss and Cash Flow Statement for the period from 21st March
2013 to 31st March 2014 ended, and a summary of significant accounting
policies and other explanatory information.
Management's Responsibility for the Financial Statements:
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility:
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error.
In making those risk assessments, the auditor considers
internal control relevant to the Company's preparation and fair
presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. 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 for the period from
21st March 2013 to 31st March 2014 , of the profit for the period ended
on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
period 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
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books ;
c. the Balance Sheet, Statement of Profit and Loss, and 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 subsection (3C) of section 211 of the Companies Act, 1956;
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441 A 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.
ANNEXURE TO THE AUDITORS' REPORT
Referred to in paragraph 3 of our report of even date,
1. a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. As explained to us, the management has physically verified most of
the fixed assets during the year and there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of the assets. No material
discrepancies were noticed on such verification.
c. The fixed assets disposed off during the year are not substantial
and hence it has not affected the going concern status of the Company
2. a. The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b. In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
c. The Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. The Company has not taken/granted any loans, secured or unsecured
to Companies, firms or other parties covered in he Register maintained
under Section 301 of the Act. Hence, provisions of clause (iii), (b),
(c), (d), (f) and (g) of paragraph 4 are not applicable to the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
5. a) In our opinion and according to the information and explanations
given to us, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public. Hence
the provisions of Section 58A, 58AA and other relevant provisions of
the Companies Act, 1956 and the Companies (Acceptance of Deposits)
Rules, 1975 are not applicable.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 in respect of Textiles and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained.
9. a) According to the records the Company is regular in depositing
with appropriate authorities 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 and other material statutory dues applicable
to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income-Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears, as
at 31st March, 2014.
c) According to the records of the Company and the information and
explanations given to us, the dues of sales tax, Income Tax, Customs
Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been
deposited on account of any dispute are as follows :
Sl. Nature Nature of Amount Period Forum where
No of the the Dues (Rs) to which dispute
Statute the amount is pending
relates
(Financial
Year)
1 Andhra Pradesh Sales Tax 3.40,160/- 2001-2002 Hon'ble A.P High
General Sales dues Court, Hyderabad
Tax (APGST)
Act, 1957
2 Andhra Pradesh Sales Tax 40,27,678/- 1997-1998 I Addl.Chief
General Sales dues Judge, City
Tax (APGST) Civil Court,
Act, 1957. Secunderabad.
(Case filed by
Bharat
Petroleum
Corporation
Ltd
10. The Company has accumulated losses ((Transferred from Suryavanshi
Spinning Mills Limited on 01.04.2013 (Appointed Date) pursuant to the
Scheme of Demerger) at the end of the financial year. The Company has
not incurred cash losses during the financial year covered by our
audit.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions and banks.
12. The Company has not granted loans and advances on basis of
security by way of pledge of shares, debentures and other securities.
13. The company is neither a chit fund nor a nidhi mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the above
referred Order are not applicable to the company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company
15. According to the information and explanations given to us,the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. In our opinion and according to the information and explanations
given to us the term loans were applied for the purpose for which the
loans were obtained.
17. In our opinion and according to the information and explanations
given to us the funds raised on short-term basis have not been used for
long-term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. During the year, the Company has not issued any debentures and
therefore the question of creating security or charge in respect
thereof does not arise.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
for BRAHMAYYA & CO.
Chartered Accountants.
Firm's Regn. No.000513S
(K.S.RAO)
Place: Hyderabad Partner
Date: September 03, 2014 Membership No.015850 |