ADINATH TEXTILES LIMITED
Report on the Ind AS Financial Statements
We have audited the accompanying financial statements of ADINATHTEXTILES LIMITED("the Company") which comprise the Balance Sheet as at 31stMarch 2021 and the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then ended anda summary of significant accounting policies and other explanatory information(hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013("the Act") in the manner so required and give a trueand fair view in conformity with the Ind AS and accounting principles generally acceptedin India of the state of affairs of the Company as at 31st March 2021 and its net profit its cash flows total comprehensive income and the changes in equity for the year endedon that date.
Basis for Opinion
We conducted our audit of the financial statement in accordance withStandard on Auditing (SAs) specified under section 143(10) of Act. Our responsibilitiesunder those Standards are further described in Auditor's Responsibilities for the Audit ofFinancial Statements section of our. We are independent of the Company in accordance withthe Code of Ethics issued by Institute of Chartered Accountants of India (ICAI) togetherwith the Independence requirement that are relevant to our audit of the FinancialStatement under the provisions of the Act and the Rule made there under and we haveFulfilled our other ethical responsibilities. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statement.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.We have determined that there are no key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor's Reportthereon
The Board of Directors is responsible for the other information. Theother information comprises the information included in the company's annual report (butdoes not include the financial statements and our auditors' report thereon).
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance forFinancial Statement
The Company's Board of Directors is responsible for the matter statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect topreparation of these financial statements that give a true and fair view of the financialposition financial performance cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards(Ind AS) prescribed under Section 133 of the Act read with therelevant rules issued there under. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so The Board of Directors are responsible for overseeingthe Company's financial reporting process.
Auditor's Responsibility for the audit of the Financial Statement
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also :
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions mis- representations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("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 a statement on the mattersspecified in the paragraph 3 and 4 of the order.
2. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich 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 beenkept by the Company so far as appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss Cash FlowStatement and the Statement of Changes in Equity dealt with by this Report are inagreement with the books of account.
d) In our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standards specified under section 133 of the Companies Act2013 read with relevant rules issued there under.
e) On the basis of written representations received from the directorsas on March 31 2021 and taken on record by the Board of Directors none of the directorsis disqualified as on March 31 2021 from being appointed as a director in terms ofSection 164 (2) of the Companies Act 2013;
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B"; and
g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statement. Refer clause vii(a) of the annexure- A tothe audit report.
(ii) The Company did not have any long term contracts includingderivative contracts for which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.
ANNEXURE- A TO THE INDEPENDENT AUDITORS- REPORT
The Annexure referred to in our Independent Auditors' Report tothe members of ADINATH TEXTILES LIMITED on the Ind AS financial statements for the yearended on 31st March 2021. We report that:
(i) (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) As explained to us all the fixed assets have not been physicallyverified by the management during the year but the Company has a regular program ofphysical verification of its fixed assets by which fixed assets are verified in a phasedmanner over a period of three years. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and nature of itsassets. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
(ii) According to the information and explanations given to us thephysical verification of inventories has been conducted at reasonable interval by themanagement. As explained to us no material discrepancies were noticed on physicalverification of inventories carried out by the management as compared to the book records.
(iii) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans secured or unsecured to CompaniesFirms and other parties covered in the register maintained under section 189 of theCompanies Act 2013.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the requirements of the section 186 of theCompanies Act 2013 pursuant to investment made. The company has not granted loans todirectors or to the person in whom directors are interested. Therefore the provisions ofsection 185 of the Companies Act 2013 are not applicable to the company.
(v) The Company has not accepted deposits from the public within themeaning of provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the rules framed there under. No order has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any courtor any other Tribunal.
(vi) As per information & explanations given by the managementmaintenance of cost records is not required to be maintained as required under sub-section (1) of section 148 of the companies Act 2013 read with Rule 3 of Companies (CostRecords and Audit) Amendment Rules 2014.
(vii) (a) According to the information and explanations given to us andthe books and records examined by us we state that the company is regular in depositingundisputed statutory dues including income tax provident fund employees state insuranceservice tax and other statutory dues to the appropriate authorities.
The details of the undisputed statutory dues to the extent of thearrears of outstanding statutory dues as on last day of financial year outstanding for aperiod of more than six months from the date they became payable :
|Name of The Statutory of Dues ||Amount in (Rs.) |
|Sales Tax ||2277956 |
|Entry Tax ||237798 |
|Interest on PF/ESI/ SALE TAX ||765207 |
(viii) In our opinion and according to the information and explanationsgiven to us the Company did not have any amount outstanding to bank financialinstitutions or debenture holders.
(ix) In our opinion and according to the information and explanationsgiven to us there were no moneys raised by way of initial public offer or further publicoffer (including debt instruments) and term loans.
(x) To the best of our knowledge and belief and according to theinformation and explanations given to us no material fraud on or by the Company by itsofficers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us andbased on our examination of records of company the company has not paid / provided anymanagerial remuneration and therefore the provisions of section 197 read with Schedule Vto the Act are not applicable to the company.
(xii) The Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.
(xiii) In our opinion all transactions with the related parties are incompliance with Section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Ind AS financial statements etc. as required by theapplicable accounting standards.
(xiv) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review and therefore the provisionsof clause 3 (xiv) of the Companies (Auditor's Report) Order 2016 are not applicable tothe Company.
(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with directors orpersons connected with the directors and therefore the provisions of clause 3 (xv) of theCompanies (Auditor's Report) Order 2016 are not applicable to the Company.
(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.
Annexure B to the Independent Auditors' Report (Referred to inparagraph 1(g) under "Report on other legal and regulatory requirements" of ourreport of even date) Report on the Internal Financial Controls under Clause (i) of subsection 3 of Section 143 of the Companies Act 2013 ('the Act')
We were engaged to audit the Internal Financial Controls over financialreporting of ADINATH TEXTILES LTD. ('the Company') as of 31 st March 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting('the Guidance Note') issued by the Institute of Chartered Accountantsof India ('the ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the company's business including adherenceto company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's Internalfinancial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Standards on Auditing issued by the ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofInternal financial controls over financial reporting and the Guidance Note issued by theICAI. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate Internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls systems on financial reporting and theiroperating effectiveness. Our audit of Internal financial controls over financial reportingincluded obtaining an understanding of Internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the Ind AS financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting of the company.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial controls over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's Internal financial controlsover financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of control material misstatements due to error or fraud may occur and may not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial reporting issued by the Institute ofChartered Accountants of India.
| ||For Malhotra Manik & Associates |
| ||Chartered Accountants |
| ||Firm's Reg. No. 015848N |
|Place : Ludhiana ||CA Amarjit Kamboj |
|Date : 25 th June 2021 ||Partner |
| ||Membership No. 082152 |
| ||UDIN : 21082152AAAAAQ4904 |