TO THE MEMBERS OF AMARJOTHI SPINNING MILLS LIMITED
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
(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
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.
||V. NARAYANASWAMI, M.A., F.C.A.
|Place : Tirupur
|Date : 24.05.2013
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
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
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
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.
10. The Company does not have any accumulated loss and has not incurred cash loss
during the financial year covered by my audit and in the immediately preceding financial
11. Based on my audit procedures and on the information and explanations given by the
management, I am of the opinion that, the company has not defaulted in repayment of dues
12. According to the information and explanations given to me, the Company has not
granted loans and advances on the basis of security by way of pledge of shares, debentures
and other securities.
13. The Company is not a chit fund or nidhi/ mutual benefit fund / society. Therefore,
the provisions of clause 4(xiii) of the Companies (Auditors Report) Order 2003 are not
applicable to the Company.
14. According to information and explanations given to me, the Company is not trading
in Shares, Mutual funds & other investments.
15. According to the information and explanations given to me, the Company has not
given any guarantees for loans taken by others from bank or financial institution.
16. Based on my audit procedures and on the information given by the management, I
report that the company has applied the term loans taken for the purpose for which they
17. Based on the information and explanations given to me and on an overall examination
of the Balance sheet of the Company as at 31st March, 2013, I report that no
funds raised on short-term basis have been used for long-term investment by the Company.
18. Based on the audit procedures performed and the information and explanations given
to me by the management, I report that the Company has not made any preferential allotment
of shares during the year.
19. The Company has no outstanding debentures during the period under audit.
20. The Company has not raised any money by way of public issue during the year.
21. Based on the audit procedures performed and information and explanations given to
me, I report that no fraud on or by the Company has been noticed or reported during the
year, nor have I been informed of such case by the management.
||V. NARAYANASWAMI, M.A., F.C.A.
|Place : Tirupur
|Date : 24.05.2013