| We have audited the accompanying financial statements of Gem Spinners
India Limited, ("the Company") which comprise the Balance Sheet as at
March 31, 2015, Statement of Profit and Loss & 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 and presentation 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
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 the
design, implementation and maintenance of adequate 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.
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 that 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 control
system over financial reporting and operating effectiveness of the such
control. 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 qualified 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 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 Profit / loss and its cash fl ow for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(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
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, 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 Balance Sheet, Statement of Profit and Loss &
the Cash Flow Statement comply with the Accounting Standards specified
under the Section 133 of the act, read with rule 7 in Companies
(Accounts) Rules, 2014.
e) 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 sub- section (2) of section 164 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 is not having any pending litigations on its financial
position in its financial statements for the year ending 31st March
2015;
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
The Annexure referred to in Our Independent Auditors' Report to the
members of the company on the financial statements for the year ended
31st March 2015, we report that
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
(b) The company has a regular program of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
at reasonable intervals by the management. According to the
information and explanations given to us, no material discrepancies
where observed by the management on such verification.
(ii) (a) The stock of inventory has been physically verified by the
management at reasonable intervals during the year. In our opinion the
frequency of Verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us the procedures of physical Verification of inventory
followed by the management are reasonable and adequate in relation to
the size and nature of its business.
(c) The company is maintaining proper records of inventory. No
material discrepancy was noticed on such physical verification.
(iii) According to the information and explanations given to us and on
the basis of our examination of the books of accounts, 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. Consequently the provisions of clause (iii)
(a) (b) and (c) are not applicable to the company.
(iv) In our opinion and according to the 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 inventory 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 the audit.
(v) The company has not accepted any deposits from the Public during
the year.
(vi) Central Government has prescribed maintenance of cost records
under sub- section (1) of section 148 of the Companies Act and such
accounts and records have been prepared and maintained by the company.
(vii)(a)According to the information and explanations given to us and
on the basis of our examination of the records of the company, amount
deducted or accrued in the books of account in respect of undisputed
statutory dues including provident fund, income-tax, sales tax, wealth
tax, service tax, value added tax, cess and other material statutory
dues have been regularly deposited by the Company with the
appropriate authorities. As explained to us, the Company is having the
following dues:
Name of Nature of Amount Period to Forum where
the Statute dues which the dispute is
amount pending
relates
ESIC ESI 0.12 2014-15 ESIC
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, income tax,
sales tax wealth tax, service tax, value added tax, cess and other
material statutory dues were in arrears as at 31st March, 2015 for a
period of more than six months from the date they became payable.
(b) However, according to the information and explanations given to us,
the following dues of income tax and employees' state insurance have
not been deposited by the company on account of disputes.
Name of Nature of Amount Period to Forum where
the Statute dues which the dispute is
amount pending
relates
Service Service Tax 58.60 2004-07, CESTAT
Tax 2008-09,
2010-11
2011-12
Sales Tax Sales Tax 11.42 2005-06 Commercial
to Tax 2009-10
(c) According to the information and explanations given to us, the
amounts which were 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 has been
transferred to such fund within time.
(viii) The Company has accumulated losses of Rs. 3262.15 lakhs as at
March 31, 2015 and 3252.29 lakhs as at March 31, 2014 and has incurred
cash Profit of Rs. 816.88 lakhs in the financial year ended March 31,
2015 as against a cash Profit of Rs, 220.47 lakhs in the immediately
preceding financial year.
(ix) The company did not have any outstanding dues to financial
institutions, banks during the year.
(x) In our opinion and 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.
(xi) The Company did not have any term loans outstanding during the
year.
(xii) 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 Vijay Sarathy & Co.,
Chartered Accountants
Firm Registration No: 004695S
P.Srikanth
Place: Chennai Partner
Date: 14.08.2015 M. No: 204279 |