| We have audited the accompanying financial statements of Salguti
Industries Limited "the Company", which comprise the Balance Sheet as
at March 31, 2015, 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's Responsibility for the Financial Statements:
The Company Board of Directors 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 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 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 and its cash flows 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 ,
to the extent applicable.
2. 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 the 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) 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.
f) 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, in our opinion and to the best of our information and according
to the explanations given to us:
i. The Company does not have any pending litigations which would
impact its financial position.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the company
Annexure referred to in paragraph 1 of Our Report of even date to the
members of Salguti Industries Limited on the accounts of the company
for the year ended 31st March, 2015 Under "Report on other Legal &
Regulatory Requirements"
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have been physically verified by the management at
reasonable intervals; no material discrepancies between the book
records and physical inventory have been noticed on such verification.
ii. (a) The inventory has been physically verified during the year by
the Management and in our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of the physical verification of
inventory followed by the Management is reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion the Company is maintaining proper records of
inventory and as explained to us, no material discrepancies were
noticed on physical verification of stocks as compared to book records.
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 Companies Act 2013.
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 inventory and fixed assets and for the sale of goods and
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 in the aforesaid internal
control system has 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 verified the books of accounts and records
maintained by the company relating to the manufacture of Textile and
Plastic products pursuant to the order made by the Central Government
for maintenance of cost records under sub-section (1) of Section 148 of
the Act, 2013, and are of the opinion that , prima facie, the
prescribed accounts and records have been maintained. We have not,
however, made a detailed examination of the records with a view to
determine, whether they are accurate and complete.
vii. (a) In our opinion the company is regular in depositing the
undisputed statutory dues, including Provident Fund, Employees' State
Insurance, Income-tax, Sales Tax, Service Tax, Custom Duty, Excise Duty
and other material statutory dues, as applicable, with the appropriate
authorities in India; There were no undisputed statutory dues in
arrears as at 31st March 2015 for a period of more than 6 months from
the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs
Duty and Excise Duty which have not been deposited on account of any
disputes.
(c) There are no amounts that are due to be transferred to the
Investors Education and protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 [1 of 1956] and rules made there
under.
viii. The Company does not have accumulated losses at the end of the
financial year and the company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
ix. In our opinion, and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
financial institution/banks. The company has not issued any debentures.
x. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loan taken by
others from bank or financial institutions. Accordingly, the
provisions of the clause is not applicable to the company.
xi. According to the information and explanations given to us, the term
loans were applied by the company for the purpose for which the loans
were obtained.
xii. To the best of our knowledge and according to the information and
explanations given to us, no material fraud on or by the company has
been noticed or reported during the year.
For P. MURALI & Co.,
CHARTERED ACCOUNTANTS
Firm Registration No: 007257S
Sd/-
A. KRISHNA RAO
PARTNER
Membership No. 020085
PLACE : HYDERABAD
DATE : 30-05-2015
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