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Deepak Spinners Ltd.

BSE: 514030 Sector: Industrials
NSE: DEEPAKSPIN ISIN Code: INE272C01013
BSE 00:00 | 02 Dec 249.10 -0.85
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NSE 05:30 | 01 Jan Deepak Spinners Ltd
OPEN 250.90
PREVIOUS CLOSE 249.95
VOLUME 7430
52-Week high 385.00
52-Week low 197.20
P/E 3.72
Mkt Cap.(Rs cr) 179
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 250.90
CLOSE 249.95
VOLUME 7430
52-Week high 385.00
52-Week low 197.20
P/E 3.72
Mkt Cap.(Rs cr) 179
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Deepak Spinners Ltd. (DEEPAKSPIN) - Auditors Report

Company auditors report

To the Members of Deepak Spinners Limited Report on the Audit of the FinancialStatements Opinion

We have audited the accompanying financial statements of Deepak Spinners Limited("the Company") which comprise the Balance sheet as at March 31 2022 theStatement of Profit and Loss including the statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "the financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2022 its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate. Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) as specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the 'Auditor's Responsibilities for the Audit ofthe Financial Statements' section of our report. We are independent of the Company

in accordance with the 'Code of Ethics' issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2022. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. For each matter below our description of how our auditaddressed 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 financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying financial statements.

S. N. Key Audit Matter Auditor's Response
1. Valuation of inventories How our audit addressed the key audit matter:
We refer to Note 2 and 9 to the financial statements. As at March 31 2022 the total carrying amount of inventories was Rs. 8117.53 Lakhs. The assessment of impairment of inventories involves significant estimation uncertainty subjective assumptions and the application of significant judgment. We have analyzed the ageing of the inventories reviewed the historical trend on whether there were significant inventories written off or reversal of the allowances for inventories obsolescence. We conducted a detailed discussion with the key management and considered their views on the adequacy of allowances for inventories obsolescence considering the current economic environment. We have also verified the subsequent selling prices in the ordinary course of business and compared against the carrying amounts of the inventories on a sampling basis at the reporting date. We found management's assessment of the allowance for inventory obsolescence to be reasonable based on available evidence.
Reviews are made periodically by management on inventories for obsolescence and decline in net realizable value below cost. Allowances are recorded against the inventories for any such declines based on historical obsolescence and slow-moving history. Key factors considered include the nature of the stock its ageing shelf life and turnover rate.
2. Trade and other receivables How our audit addressed the key audit matter:
As disclosed in Note 6781013 and 15 to the financial statements. We obtained an understanding of the Company's credit policy for trade receivables and evaluated the processes for identifying impairment indicators. We have reviewed and tested the ageing of trade and other receivables. We have reviewed management's assessment on the credit worthiness of selected customers for trade receivables. We further discussed with the key management on the adequacy of the allowance for impairment recorded by the Company and reviewed the supporting documents provided by management in relation to their assessment. We have also reviewed the adequacy and appropriateness of the impairment charge based on the available information. Based on our audit procedures performed we found management's assessment of the recoverability of trade and other receivables to be reasonable and the disclosures to be appropriate.
The Company assesses periodically and at each financial year end the expected credit loss associated with its receivables. When there is expected credit loss the amount and timing of future cash flows are estimated based on historical current and forward- looking loss experience for assets with similar credit risk characteristics. We focused on this area because of its significance and the degree of judgement required to estimate the expected credit loss and determining the carrying amount of trade and other receivables as at the reporting date.
3. Evaluation of uncertain tax positions How our audit addressed the key audit matter:
Refer Notes 2 25 and 38 to the Financial Statements. We have obtained details of complete tax assessments and demands as at March 31 2022 from management. We considered management's assessment of the validity and adequacy of provisions for uncertain tax positions evaluating the basis of assessment and reviewing relevant correspondence and legal advice where available including any information regarding similar cases with the relevant tax authorities. We assessed validity and adequacy of provisions for uncertain tax positions in respect of various tax demands and liabilities and found the appropriateness of management's assumptions and estimates reasonable.
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes.

Other Information

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 financial statements and our auditor's report thereon. We have obtained all otherinformation prior to the date of this auditors' report.

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 the 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.

Responsibilities of Management 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 financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany'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.

The 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 highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it

exists. 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 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 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 inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality

and qualitative factors in (i) planning the scope of our audit work and in evaluatingthe results of our work; and (ii) to evaluate the effect of any identified misstatementsin the financial statements.

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 2022 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 2020 ("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 inparagraphs 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 explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified

under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 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 with reference to these financial statements and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B" tothis report;

(g) In our opinion the managerial remuneration for the year ended March 31 2022 hasbeen paid /provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended 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 its financialposition in its financial statements - Refer Note 38 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. a. The management has represented

that to the best of it's knowledge and belief other than as disclosed in the notes tothe accounts no funds have been advanced or loaned or invested (either from borrowedfunds or share premium or any other sources or kind of funds) by the Company to or in anyother persons or entities including foreign entities ("Intermediaries") with

the understanding whether recorded in writing or otherwise that the Intermediariesshall whether directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Company ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries

b. The management has represented that to the best of it's knowledge and beliefother than as disclosed in the notes to the accounts no funds have been received by theCompany from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures we have considered reasonable and appropriate in thecircumstances nothing has come to their notice that has caused them to believe that therepresentations under sub-clause

(i) and (ii) contain any material misstatement

v. During the year the Company has declared and paid dividend amounted to Rs. 143.79Lakhs for the year ended March 31 2021 which is in compliance of section 123 of theCompanies Act 2013.

For J K V S & CO.
Chartered Accountants
Firm Reg. No. 318086E
Sajal Goyal
Partner
Place: New Delhi Membership No. 523903
Date: May 10 2022 Udin: 22523903AISLCY7862

Annexure 'A' to Independent Auditor's

Annexure 'A' to Independent Auditor's Report of even date to members of Deepak SpinnersLimited on the financial statements as of and for the year ended March 31 2022 (Referredto in paragraph 1 of our report of even date on the other legal and regulatoryrequirements)

(i) (a) (A) The Company is maintaining proper

records showing full particulars including quantitative details and situation ofproperty plant & equipment.

(B) The Company is maintaining proper records showing full particulars of intangibleassets

(b) The Company has a regular programme of physical verification of its property plantand equipment by which property plant and equipment are verified in a phased manner overa period of three years which in our opinion is reasonable having regard to the size ofthe company and nature of its property plant and equipment. In accordance with thisprogramme property plant and equipments were physically verified during the year and nomaterial discrepancies were noticed.

(c) The title deeds of immovable properties included in property plant and equipmentare held in the name of the company except freehold land for Rs. 2.42 Lakhs held by thecompany since 21st February1994 for which registration is pending and title deed held isin the name of sellers other than promoter director or relative of promoter/ director oremployee of promoter/director.

(d) The Company has not revalued its property plant and equipment (including right ofuse assets) and intangible assets during the year. Therefore the provisions of clause3(i)(d) of the Order are not applicable to the Company.

(e) According to information and explanations given by the management no proceedingshave been initiated or are pending against the Company for holding any benami propertyunder the Prohibition of Benami Property Transactions Act 1988 and rules made thereunder.Therefore provisions of clause 3(1)(e) of the Order are not applicable to the Company

(ii) a. The management has conducted physical

verification of inventories during the year at reasonable interval and in our opinionthe coverage and procedure of such verification by the management is appropriate. Nodiscrepancies of 10% or more in the aggregate for each class of inventory were noticed onsuch physical verification.

b. The Company has been sanctioned working capital limits during the year in excess offive crores rupees in aggregate from a bank on the basis of security of current assets.Based on the examinations of the books of accounts and quarterly statements submitted tothe bank aggregate value of stocks and debtors are not in agreement with the books ofaccounts as mentioned in note no. 21 to the financial statements.

(iii) During the year the Company has not made any investment in firms limitedliability partnership or any other parties except investment in a company which is notprejudicial to the interest of the Company. The Company has not provided any guarantee orsecurity or granted any loans or advances in the nature of loans secured or unsecured tocompanies firms limited liability partnership or any other parties during the year.

(iv) The Company has no transaction with respect to loan investment guarantee andsecurity covered under section 185 and 186 of the Companies Act 2013 during the year.Therefore the provisions of clause 3(iv) of the Order are not applicable to the Company.

(v) The Company has not accepted any deposit or amount which are deemed to be depositscovered under sections 73 to 76 of the Companies Act 2013 and the Companies (Acceptanceof Deposits) Rules 2014 (as amended) during the year. Therefore provisions of clause3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of the Company's products to whichthe said rules are applicable and are of the opinion that prima facie the prescribedrecords have been made and maintained. We have not however made a detailed examinationof the said records with a view to determine whether they are accurate or complete.

(vii) a. According to the records of the Company

examined by us the Company is regular in depositing undisputed statutory duesincluding Goods and Service Tax Provident Fund Employees State Insurance Income-taxSales tax Service tax Duty of customs Duty of excise Value Added tax Cess and otherstatutory dues as applicable with the appropriate authorities. There were no undisputedoutstanding statutory dues as at the yearend for a period of more than

six months from the date they became payable.

b. According to the information and explanation given to us and the records of theCompany

examined by us there are no statutory dues referred to in sub-clause (a) on account ofany dispute except the followings:

Name of Statue Nature of dues Amount (Rs. In Lakhs) Forum where dispute is pending Period
The Central Excise Act1944 Demand for excise duty 5.63 Hon’ble High Court Shimla 2004-05
2.34 CESTAT 2007-08
Income Tax Act 1961 Dispute relating to carry forward unabsorbed depreciation and provision for doubtful debts. 6.25 CIT (Appeals) Kolkata Assessment year 2011-12
Short allowance of credit of TDS and excess charge of Interest 0.76 CIT (Appeals) Kolkata Assessment year 1998-99
Disallowance of expenses etc. 1.21 CIT (Appeals) Kolkata Assessment Year 2012-13
MAT Credit disallowance 21.39 CIT (Appeals) Kolkata Assessment year 2015-16
Various disallowances 46.63 CIT (Appeals) Kolkata Assessment year 2018-19
The Employees' Provident funds and Miscellaneous Provision Act 1952 Provident fund liability on Apprentices trainees 70.33 Central Government Industrial Tribunal cum Labour court- Jabalpur 2012-13
The Madhya Pradesh Upkar Adhiniyam 1981 Cess on captive generation of electricity 17.75 Hon’ble Madhya Pradesh High Court Bench Gwalior 2012
Madhya Pradesh Vidyut Shulk Abhiniyam 2012 Dispute in relation to rate of electricity duty including interest 528.25 Hon’ble Madhya Pradesh High Court Bench Gwalior 2017-18

(viii) According to the information and explanation given to us there were notransactions which have not recorded in the books of account have been surrendered ordisclosed as income in the tax assessments under the Income Tax Act 1961 (43 of 1961)during the year. Therefore provisions of clause 3(viii) of the Order are not applicableto the Company

(ix) a. The Company has not defaulted in repayment

of loan and in the payment of interest thereon during the year. Therefore theprovisions of clause 3(ix)(a) of the Order are not applicable to the Company.

b. According to information and explanations given by the management the Company isnot declared willful defaulter by any bank or financial institution or other lender.

c. The Company has not obtained any term loan during the year. Therefore theprovisions of clause 3(ix)(c) of the Order are not applicable to the Company.

d. According to the information and explanations given to us and the proceduresperformed by

us and on an overall examination of the financial statements of the company we reportthat no funds raised on short-term basis have been used for long-term purposes by theCompany.

e. The Company has no subsidiaries joint ventures or associates. Therefore theprovisions of clause 3(ix)(e) of the Order are not applicable to the Company.

f The Company has not raised any loan during the year. Therefore the provisions ofclause 3(ix)(f) of the Order are not applicable to the Company.

(x) a. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Therefore the provisions ofclause 3(x)(a) of the Order are not applicable to the Company.

b. The Company has not made any preferential allotment or private placement of sharesor convertible debentures (fully partially or optionally convertible) during the year.Therefore the provisions of clause 3(x)(b) of the Order are not applicable to theCompany.

(xi) a. Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given to us we have neither come across any instance of fraud by the Companyor on the Company noticed or reported during the year nor have we been informed of anysuch case by the management.

b. We have not came across any instance of fraud therefore report under sub-section 12of section 143 of the Companies Act2013 is not required to be filed by us in Form ADT-4as prescribed under rule 13 of the Companies (Audit and Auditors) Rules 2014 with theCentral Government.

c. As reported to us by the management there are no whistle-blower complaints receivedby the Company during the year.

(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.

(xiii) As per records of the Company examined by us transactions with the relatedparties are in compliance with section 177 and 188 of the Companies Act 2013 whereapplicable and details for the same have been disclosed in the financial statements asrequired by the applicable Indian Accounting Standards.

(xiv) a. In our opinion and based on our examination the Company has an internal auditsystem commensurate with the size and nature of its business;

b. We have considered internal audit reports of the Company issued till date for theperiod under audit.

(xv) According to the information and explanations given to us in our opinion theCompany has not entered into any non-cash transactions with its directors or personsconnected with them during the year hence provision of section 192 of the Companies Act2013 are not applicable to the Company. Therefore the provisions of clause 3(xv) of theOrder are not applicable to the Company.

(xvi) a. In our opinion the Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Therefore the provisions of clause 3(xvi)(a)of the Order are not applicable to the Company.

b. In our opinion the Company has not conducted any Non-Banking Financial or HousingFinance activities during the year. Therefore the provisions of clause 3(xvi)(b) of theOrder are not applicable to the Company.

c. In our opinion the Company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India. Therefore the provisions of clause3(xvi)(c) of the Order are not applicable to the Company.

d. According to the representations given by the management there is no CIC as part ofthe Group.

(xvii) The Company has not incurred cash loss in the financial year and in theimmediately preceding financial year. Therefore the provisions of clause 3(xvii) of theOrder are not applicable to the Company.

(xviii) There has been no resignation of statutory auditor during the year. Thereforethe provisions of clause 3(xviii) of the Order are not applicable to the Company.

(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realization of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report thatthe Company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xx) The Company has no unspent amount relating to CSR activity which is required tobe transferred to a fund specified in Schedule VII to the Companies Act 2013. Thereforethe provisions of clause 3(xx) of the Order are not applicable to the Company.

(xxi) The Company does not have subsidiary associate or joint venture. Therefore theprovisions of clause 3(xxi) of the Order are not applicable to the Company.

For J K V S & CO.
Chartered Accountants
Firm Reg. No. 318086E
Sajal Goyal
Partner
Place: New Delhi Membership No. 523903
Date: May 10 2022 Udin: 22523903AISLCY7862

Annexure 'B' to Independent Auditor's

Annexure B to Independent Auditor's Report of even date to the members of DeepakSpinners Limited on the financial statements for the year ended March 31 2022 (Referredto in paragraph 2(f) of our report on the other legal and regulatory requirements)

We have audited the internal financial controls with reference to financial statementsof Deepak Spinners Limited ("the Company") as of March 31 2022 in conjunctionwith our audit of the financial statements of the Company for the year ended 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 Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial

controls system with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A company's internal financial control with reference to financial statements 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls over financial reporting were operating effectively as at March 312022 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute

of Chartered Accountants of India however needs to be further strengthened.

For J K V S & CO.
Chartered Accountants
Firm Reg. No. 318086E
Sajal Goyal
Partner
Place: New Delhi Membership No. 523903
Date: May 10 2022 Udin: 22523903AISLCY7862

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