| We have audited the accompanying financial statements of Amit Spinning
Industries Limited ("the Company), which comprise the Balance Sheet as
at March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information Management's
Responsibility for the Financial Statements The management and Board of
Directors of the Company are 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 Companies (Accounts) Rules,
2014. This responsibility 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; design,
implementation and maintenance of adequate internal financial controls,
that are 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.
Auditor 's 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 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, 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 management and Board of
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.
Basis for Qualified Opinion
We draw attention to:
a. Note No. 30
with respect to recoverability of amount of 1,93,46,572 in respect of
duty drawbacks.
We report that had the Company decided to write off the sums as
mentioned above, the loss for the year would have been greater by
Rs.1,93,46,572 and would have amounted to Rs.26,05,17,316 (as against
the reported figure of Rs.24,11,70,744), with a consequential effect on
Accumulated losses and Loans and Advances. Qualified Opinion In our
opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above, the
aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India of the state
of affairs of the Company as at 31st March 2015, its loss and its cash
flows for the year ended on that date. Emphasis of Matters We draw
attention to the following matters in the Notes to the financial
statements:
Note 31
in the financial statements which indicates that the Company has
accumulated losses and its net worth has been fully eroded, the Company
has incurred a net cash loss during the current and previous year(s)
and, the Company's current liabilities exceeded its current assets as
at the balance sheet date. These conditions, along with other matters
set forth in Note 31, indicate the existence of a material uncertainty
that may cast significant doubt about the Company's ability to continue
as a going concern. However, the financial statements of the Company
have been prepared on a going concern basis for the reasons stated in
the said Note. Our opinion is not modified in respect of these
matters. 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 sub- section (11) of
section143 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 further 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
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 aforesaid financial statements comply with the
applicable Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules 2014;
e. The going concern matter described in sub-paragraph (b) under the
Emphasis of Matters paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company;
f. on the basis of written representations received from the directors
as on March 31, 2015, and 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;
g. In our opinion and to the best of our information and according to
the explanations given to us, we report as under with respect to other
matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014:
(i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 25 to the
financial statements; (ii) The Company did not have any long-term
contracts including derivative contracts; as such the question of
commenting on any material foreseeable losses thereon does not arise;
(iii) There has not been an occasion in case of the Company during the
year under report to transfer any sums to the Investor Education and
Protection Fund; as such the question of delay in transferring such
sums does not arise.
Annexure referred to in paragraph 7 of our report of even date to the
members of Amit Spinning Industries Limited on the accounts of the
company for the year ended 31st March, 2015 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:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the fixed assets are physically verified by the
management according to a phased programmed 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 the nature of its assets;
as informed to us no material discrepancies were noticed on such
verification.
(ii) (a) The company has conducted physical verification of inventory
at reasonable intervals during the year. In our opinion, the frequency
of such verification is reasonable.
(b) In our opinion and according to information and explanations given
to us, the procedures for physical verification of inventory followed
by the management are reasonable having regard to the size of the
Company and nature of its business.
(c) The company is maintaining proper records of inventory. The
discrepancies noticed on physical verification were not material and
have been properly dealt with in the books account.
(iii) 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 Act. As the Company has not granted any such
loans, provisions of clause 3(iii)(a) and (iii)(b) of the Order are not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets and for the sale of services. Further, on the
basis of our examination of the books and records of the Company and
according to the information and explanations given to us, no major
weakness has not been noticed or reported.
(v) The Company has not accepted any deposits from the public covered
under Section 73 to 76 of the Companies Act, 2013
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under (1) of Section 148 of the Companies Act, 2013 and are
of opinion that prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete. (vii) (a) According to the information and
explanations given to us and based on the records of the company
examined by us, the company is generally regular in depositing the
undisputed statutory dues, including Provident Fund, Employees' State
Insurance, Income- tax, Sales-tax, Value Added Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty and other material statutory dues, as
applicable, with the appropriate authorities and there are no arrears
of undisputed outstanding statutory dues as at the last day of the
financial year concerned for a period of more than six months from the
date they became payable.
(b) According to the information and explanations given to us, details
of following government dues, which have not been deposited on account
of any dispute are given below:
Sl
nO. Name of the Nature of dues Amount (Rs.) Period to which
statute the amount
relates
1 Maharashtra Sales Tax and 10,44,000 2004-05
Value Added
Tax penalty (net of
payment of
Rs. 2,00,000
under
protest)
2 Maharashtra Sales Tax and 9,64,390 2009-10
Value Added
Tax penalty (net of
payment of
Rs.16,90,614
by way of
adjustment
of refund)
Name of the statue forum where the dispute is pending
Maharashtra value added tax First Appellate Authority
Maharastra value Added Tax First Appellate Authority
(c) As there has not been an occasion in case of the Company during the
year under report to transfer any sums to the Investor Education and
Protection Fund, the question of reporting delay in transferring such
sums does not arise.
(viii) The accumulated losses at end of financial year are more than
50% of its net worth. The Company incurred cash loss before working
capital changes amounting to Rs. 8,78,79,614 in the year under audit
whereas it was Rs. 1,35,91,753 during the preceding financial year.
(ix) According to the information and explanations given to us and
records examined by us, we are of the opinion that the Company has
defaulted in repayment of the dues to a bank as infra. The Company did
not have outstanding dues to any financial institution and did not have
outstanding debentures during the year under audit.
Bankers Type of Loan Out Standing Overdue Over due
as on 31.3.2015 Interest Principal
Axis Bank Term Loan
(10% p.a.) 12,61,67,234 11,78,660 89,88,574
Axis Bank FITL
(10% p.a.) 63,26,521 59,022 4,47,499
Axis Bank WCTL
(10% p.a.) 55,31,701 51,701 3,80,000
UCO Bank WCTL 94,60,163 46,35,000 10,75,163
Grand T
otal 14,74,85,619 59,24,383 1,08,91,236
(Rs,)
Bankers Default status
Axis Bank The overdue principal as on
Axis Bank 31.03.2015 has not been paid till
Axis Bank balance sheet date
UCO Bank The Account has become NPA and the
matter is before BIFR for restructuring.
Grand Total
Further, as informed to us, the loan facilities availed from UCO Bank
as working capital term loan (outstanding balance as on 31.3.2015
amounting to Rs.1,40,95,163) and cash credit facilities (outstanding
balance as on 31.3.2015 amounting to Rs. 9,14,95,976) have become
non-performing asset (NPA) for the lender as the company has not paid
the dues within 90 days of payments being falling due.
(x) According to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans
taken by others from banks or financial institutions during the year
under audit, are not prejudicial to the interest of the Company.
(xi) In our opinion and according to information and explanations given
to us, the term loans have been applied for the purpose for which these
were raised.
(xii) During the course of our examination of the books and records of
the company, carried in accordance with the auditing standards
generally accepted in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the course of
our audit nor have we been informed of any such instance by the
Management.
For Sunil Jain & Co.
Chartered Accountants
(Registration No. 003855N)
Sd/-
Sanchit Jain
Place New Delhi Partner
Date : May 27, 2015 Membership No. 511714 |