Amit Spinning Industries Ltd.
|BSE: 521076||Sector: Industrials|
|NSE: ASIL||ISIN Code: INE988A01026|
|BSE 00:00 | 04 Mar||Amit Spinning Industries Ltd|
|NSE 05:30 | 01 Jan||Amit Spinning Industries Ltd|
|BSE: 521076||Sector: Industrials|
|NSE: ASIL||ISIN Code: INE988A01026|
|BSE 00:00 | 04 Mar||Amit Spinning Industries Ltd|
|NSE 05:30 | 01 Jan||Amit Spinning Industries Ltd|
The Members of Girnar Spintex Industries Limited (Formerly Known as Amit SpinningIndustries Limited)
Report on the Audit of Ind AS Financial Statements
We have audited the accompanying Ind AS Financial Statements of GIRNAR SPINTEXINDUSTIRES LIMITED ("The Company") which comprise the Balance sheet as atMarch 31 2020 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the Standalone Financial Statements including a summaryof significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph below the aforesaid Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2020 its loss and its cash flows and changes in equity for theyear ended on that date.
Basis for Qualified Opinion
1. Impairment loss if any needs to be accounted for by the company by forecasting itscash flow to analyze whether the cost of the asset is recoverable or not.
2. Due to non-availability of sanction from SEBI the effect of reduction in the sharecapital is still to be given in the accounts. On giving effect to this the share capitalof the company will get reduced by Rs.1852.63 Lakhs. Accordingly the liabilities writtenback and the assets written off as a result of approved resolution plan by NCLT standscredited to Insolvency and Bankruptcy Reserve the balance in which as on 31.03.2020 isRs.1247907322/-
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS Financial Statements for the financialyear ended March 31 2020. These matters were addressed in the context of our audit of theStandalone Ind AS Financial Statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Standalone Ind AS Financial Statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Ind AS Financial Statements. The
results of our audit procedures including the procedures performed to address thematters below provide the basis for our audit opinion on the accompanying Standalone IndAS Financial Statements.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe Ind AS Financial Statements and our auditors' report thereon.
Our opinion on the Financial Statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements our responsibility is to readthe other information and in doing so consider whether such other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS Financial Statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS Financial Statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.
In preparing the Ind AS Financial Statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists.
Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Ind AS Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Ind AS 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 misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 in the Ind AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS FinancialStatements including the disclosures and whether the Ind AS Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Financial Statements for thefinancial year ended March 31 2020 and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould 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 ofthe Act we give in the Annexure A a statement on the matters Specified in paragraphs 3and 4 of the Order.
2. As required by section 143(3) of the Act we further report that:
a) we have sought and except for the matters described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;
b) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as appears from our examination of those books;
c) the Balance Sheet Statement of Profit and Loss Statement of Changes in Equity andCash Flow Statement dealt with by this Report are in agreement with the books of account;
d) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph in our opinion the aforesaid financial statements comply with the
applicable Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014;
e) On the basis of written representations received from the directors as on March 312020 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct;
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B";
g) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note B-2 to the financial statements;
(ii) The Company did not have any long-term contracts including derivative contractswhich there were any material foreseeable losses.
(iii) The company is not liable for contribution to the Investor Education andProtection Fund.
SANJAY VHANBATTE AND COMPANY
Chartered Accountants FRN NO.112996W
Annexure A of our report of even date to the members of Girnar Spintex Industries Ltd.(Formerly Known As Amit Spinning Industries Limited) on the accounts of the company forthe year ended 31st March 2020
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:
a. The Company's records of fixed assets need improvement inasmuch as the records nowmaintained need to have full particulars including quantitative details and situation offixed assets.
b. As explained to us the fixed assets are physically verified by the managementduring the year after the taking over by the new management which in our opinion isreasonable having regard to the size of the Company and the nature of its assets; asinformed to us no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) Physical verification of inventory has been conducted at reasonable intervals bythe management and no material discrepancies were noticed
(iii) The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to us thecompany has not granted any loans made any investments provided any guarantees or givenany security attracting the provisions of section 185 and I86 of the Companies Act 2013.
(v) The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013
(vi) The turnover of the company during the immediately preceding financial year beingless than Rs.35 Crores the company is not liable to maintain cost records for the yearunder audit.
(vii) (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is not regular in depositing theundisputed statutory dues including Income-tax GST and other material statutory duesas applicable with the appropriate authorities.
(b) The arrears of undisputed outstanding statutory dues as on the last day of the
financial year concerned for a period of more than six months from the date they becamepayable: It is claimed by the company that as per the order of NCLT approving ResolutionPlan of the Company under IBC all statutory dues pertaining to the period prior to thedate of NCLT order stand resolved and no dues remain payable.
(c) Disputed Statutory Dues: According to the records of the Company there arefollowing dues of Income-tax Sales-tax Gram panchayat Tax and water charges remainingun-deposited as on March 31 2020. The company disputes the liability in view of the orderof NCLT dated 31.07.2018 approving Insolvency Resolution Plan of the Company.
Note : All above dues have been waived off as per resolution plan approved by NCLT.
(viii) In our opinion and according to the information and explanations provided by themanagement the company is not defaults in repayment of loans or borrowing to banks whichare borrowed after change in management consequent to implementation of InsolvencyResolution Plan approved by NCLT. The Company has no dues towards financial institutionsor debenture holders.
(ix) In our opinion and according to the information and explanations provided by themanagement the term loans raised by the company during the year have been utilized forthe purpose for which they were sanctioned. The Company did not raise
any money by way of initial public offer or further public offer (including debtinstruments) during the year.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided for anymanagerial remuneration during the year under audit.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable and hence not commented upon.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into noncashtransactions with directors or persons connected with him as referred to in section 192 ofCompanies Act 2013.
(xvi) According to the information and explanations provided to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
For SANJAY VHANBATTE & CO.
Chartered Accountants FRN NO.112996W
To the Independent Auditors' Report on the Ind AS Financial Statements of
Girnar Spintex Industries Limited
(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' of our
report of even date)
REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (i) OFSUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of GIRNARSPINTEX INDUSTRIES LIMITED ("the Company") as of March 31 2020 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. 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 was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment
of the risks of material misstatement of the Ind AS financial statements whether dueto fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts and paymentsof the company are being made only in accordance with authorizations of management anddirectors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the Ind AS financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting as at March 31 2020.
According to the information and explanations given to us the company does not havedocumented framework of Internal financial control over financial reporting on criteriabased on or considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.
The company did not have an appropriate internal control system for obtainingconfirmation from parties included under the head trade payables loans and advances andother current liabilities and its reconciliation/consequential adjustments if any.
The company's internal financial controls were not operating effectively in respect ofthe above.
In our opinion except for the possible effects of the material weaknesses describedabove on the achievement of the objectives of the control criteria the Company has inall material respects an adequate internal financial controls system over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at March 31 2020 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.
We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2020Ind AS financial statements of the Company and these material weaknesses have affectedour opinion on the Ind AS financial statements of the Company and we have accordinglyissued a qualified opinion on the Ind AS financial statements.
For SANJAY VHANBATTE AND CO.
Chartered Accountants FRN NO.112996W